Not everyone knows what Workers’ Compensation Insurance is, but most people know it’s something they should have. It protects businesses in the event of employee injuries or death, and since it’s required by law in most states, any business not covered is putting itself at risk of major financial penalties if an employee gets hurt on the job.
Here are 10 reasons why you should get Worker’s Compensation Insurance to protect your business from fines and lawsuits and keep your employees protected while they work.
1) To Protect Your Employees
When you have employees, you’re required by law to obtain workers’ compensation insurance to protect them in case of injury. If they are injured on your premises or while they’re doing business on your behalf and you don’t have workers’ comp, you could be held personally liable for any damages.
In such a situation, it would be hard to pay those damages out of pocket and your business itself would probably end up suffering. When you work with an agency like ours we help make sure that your staff is covered and will help with any claims that arise from accidents or injuries at work or on company property during working hours.
2) You might lose your business
By some estimates, more than one-third of all new businesses fail within their first five years. The financial strain alone can be enough to make you consider giving up entirely, but not having an insurance policy in place could mean you lose even more.
If your business isn’t covered by workers’ compensation insurance and an employee is injured on your watch, he or she may be able to sue you for medical expenses—or any wages that aren’t covered by worker’s comp. And if a suit like that goes against you, it can quickly drive your business into bankruptcy court.
3) To Avoid Liability Suits
The easiest way to make sure you don’t get sued for your business practices is to be covered by workers comp insurance. This will reduce your chances of facing a lawsuit and having to pay out costly damages. Liability lawsuits can take over your life, even if you’re completely innocent of any wrongdoing.
They can also drain away all of your company’s assets, meaning you may not be able to continue working with that same team or at that same location in the future. If nothing else, a workers comp policy is great protection against employee negligence and liability issues – it could save you hundreds or thousands down the road.
4) Your assets are protected
If a workplace injury occurs, you are protected from losing your business and personal assets. Many individuals who are hurt on their job do not have any insurance that will protect them from going into debt if they’re unable to work. Your cash flow will remain steady: Without insurance, workers can’t work while they recover.
This means no income during recovery time – a huge hit to small businesses and family budgets. Limit your liability: If an employee is injured on their way to or from work or if someone slips and falls at your place of business, worker’s compensation will cover all medical costs related to their injuries and pay for any lost wages that resulted due to an illness or injury on your job site in Colorado.
Employers that carry workers’ compensation insurance will have lower costs associated with their employees’ health care, which is often a good thing in an industry where employee injuries are more common than you might think. Having worker’s compensation insurance makes you look like a responsible employer who cares about keeping its employees safe.
And as a bonus, it may also make you less likely to be sued if one of your employees gets hurt on the job. If a person gets injured because of your company’s negligence, is covered by workers’ compensation could mean paying them less in a settlement or court-awarded damages.
6) If you don’t have it, you will be shut down by the government
It may not be a question of if you’ll need workers’ compensation insurance, but when. If you don’t have it, your business will be forced to close by OSHA; so make sure that you purchase workers’ compensation insurance before an injury occurs.
In most states, employers must carry workers comp for their employees or face penalties. Do your research: Not all businesses are created equal, which means not all plans are either. Make sure that you do your research into which policy is right for your business and then buy one immediately before an accident happens to avoid fines and legal issues later on down the road.
7) It can be mandated by your state or industry association
In some cases, your company may be required to have workers’ compensation insurance. For example, if you work in construction, manufacturing, or other fields that require physical labor, certain states might require you to have coverage.
Or, if you work in industries like food services or healthcare and provide care directly to patients or customers (as opposed to an office job), you may also need coverage—which could mean penalties for not having it. Bottom line: It pays to know your state’s laws when it comes to workers comp.
8) You won’t have to pay any medical fees if an employee gets hurt on the job.
When you have workers’ compensation insurance, you don’t have to pay for any of your employee’s medical expenses if they get hurt on the job. Depending on what type of policy you purchase, it can also cover prescription medications and disability payments while your employee is unable to work.
Some policies also provide coverage if your employee gets sick while they are at work; many companies require them to wear protective gear or glasses, and a lot of people who work in environments that aren’t overly safe don’t always wear them. If an accident occurs due to their neglect (even if they were told to), then you can get coverage that will help cover costs related to any damage caused by their injuries.
9) Lack of coverage is a major financial risk to you as an employer.
A serious injury to a worker can take an enormous toll on your company and all its employees. By not carrying workers’ compensation insurance, you could be putting your organization at risk for lawsuits, fines, and financial hardship. For example, if an employee is hurt or made ill on duty and decides to sue you for damages, he or she may win.
This is especially true if it’s a serious case of workplace negligence. In addition to any damages awarded by a court, you’ll also have to pay your legal fees—an expense that can add up. To protect yourself from losses like these—and help keep your business running smoothly—you need workers’ compensation insurance coverage in place before something happens.
10) The ACA says you must offer it.
The big one. Regardless of your business size, you are legally required to offer health insurance coverage to all full-time employees, part-time employees that work more than 30 hours per week, and any temporary or seasonal workers who work a total of 120 days in a year. This applies whether or not you pay any wages at all. So be aware—and act accordingly!
If you do decide to provide benefits, make sure they meet ACA standards by being affordable (i.e., no employee can have to spend more than 9.5% of their income on premiums), minimum essential (the package must include certain items like hospitalization and prescription drugs), and non-discriminatory (you can’t favor highly compensated employees).