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Does Your Small Business Need Workers’ Compensation Insurance?

March 19, 2016

Owning a small business means that you have a lot to protect, and choosing the right insurance coverage can be the difference between your business succeeding, or failing. It can often be hard to determine exactly what kind of insurance coverage your business actually needs, and when it comes to workers’ compensation insurance, many small business owners don’t even fully understand what it is, let alone know whether they need it or not. 

What is workers’ compensation?

In simple terms, workers’ compensation is a form of insurance designed to cover the medical and rehabilitation expenses of any one of your employees, should they happen to injure themselves while working for you, and it can also cover a loss of earnings. 

If you purchase insurance to cover these costs, it usually means that your staff no longer have the right to sue you or your business for any form of negligence in the workplace; they are then given the assurance that they will not need to become embroiled in a complicated and costly lawsuit if they do happen to injure themselves while at work. 

Does my small business need workers’ compensation?

All small business owners know that accidents can easily happen at work, no matter how clear your health and safety policies are, or how much you trust your staff. Employees are also becoming more and more aware of their rights, with many being quick to sue companies if they are not provided with some sort of financial assistance in the event of an accident at work. 

It’s also worth bearing in mind that almost every state in America requires businesses to carry this kind of insurance as soon as they have one or more employees (this number can vary according to the state you are in), and penalties issued, can often be severe. 

Even if the state in which your business exists does not require your small business to have workers’ compensation insurance, you still may find that potential clients avoid doing business with you if you don’t carry it. 

How do I choose the right policy for my business?

With such a difference in the requirements of each state regarding this kind of policy, perhaps the best way of ensuring that you get the right coverage, is to hire a professional insurance broker; not only are they experts in this field, but their services could actually end up saving you money by helping you to avoid costly lawsuits from injured employees.

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