If you have employees, and especially if you have workers who are regular visitors to your business premises, then you probably need to be aware of workers’ compensation insurance.
Workers’ comp insurance is a type of liability business insurance that covers the costs of employee medical bills or wage replacements in case they get injured or contract an illness while performing their job duties. These costs can be quite high and may put your company at financial risk if you aren’t able to pay the costs out-of-pocket.
Keep reading to learn more reasons why every business needs worker’s comp insurance.
Protect Your Business
Workers comp insurance protects your business by covering the costs of employee medical bills and lost wages if an employee becomes injured or contracts a work-related illness. Without this coverage, you would lose money paying workers for injuries sustained on the job, as well as lost income — which could seriously damage your business finances.
Reduce the Risk of Lawsuits
In addition to protecting your business from the financial costs of employee injuries, worker’s comp insurance can help reduce your risk of being sued.
If your business doesn’t have this insurance, then injured employees could sue you for lost wages and medical bills. This could lead to costly legal battles and expensive settlements, which could damage your company’s financial standing and reputation.
In contrast, having worker’s comp insurance can help protect your business from lawsuits. If an employee is injured and qualifies for insurance benefits, they’ll be paid from the insurance fund. This means they won’t be able to sue you for lost wages or medical bills.
Comply with Legal Regulations
In addition to protecting your business from lawsuits and financial stress, worker’s comp insurance is also required by law in many states. If your business is located in one of these states, you must have worker’s comp insurance or face penalties from the government.
In these states, the government worker’s compensation department will require you to have a policy before they issue you a worker’s comp certificate. This certificate is necessary for you to hire employees and have them legally perform work on your premises.
Boost Worker Productivity and Morale
Finally, having worker’s comp insurance can boost worker productivity and morale. This is because worker’s comp insurance provides financial support to injured workers who cannot perform their job duties.
Injured workers who receive financial support from worker’s comp insurance are less likely to feel stressed out and pressured. This can help boost productivity by reducing the time your employees are off work due to injury. It can also help boost morale since injured workers can focus on their job rather than their financial problems.
In Conclusion
For some business owners, operating without worker’s compensation insurance is a risk that they feel they can take. However, this could be a risky move for your company if you don’t have this sort of business insurance.
After all, as an independent business owner, every dollar spent on premiums reduces your operating cash. However, as you can see from the points above, failure to obtain worker’s comp insurance can leave your business with significant financial risks and consequences.
