It’s amazing that a business gets going at all, given the amount of money and time it takes. Every day, a group of eager, optimistic Americans has an idea for how to fill a void in a competitive market. Then, they put up a virtual or physical sign saying they are open for business.

These doers create company strategies, hire personnel, hire marketing consultants, and buy computer systems. However, what steps should they take to prepare for the long run? What should these business owners do to protect their investments, especially as they begin to make a substantial profit? Worker’s compensation insurance is something for these owners to consider. Purchasing workers’ compensation insurance safeguards not just your company, but also your employees.

Workers’ compensation insurance provides coverage for employees who receive an injury or become ill at work. It assists in covering the costs of injured or sick employees’ pay as well as rehabilitation and medical expenses. In addition, workers’ compensation gives death payments to help cover funeral costs if one of your employees dies as a result of a work-related injury.

How Workers’ Compensation Insurance Can Help You Protect Your Company

While the injured worker receives the monetary benefit, the business owner also benefits from workers’ compensation. An injured or ill person may sue the corporation for compensation if a worker is not insured. If this happens, the company may find itself in a bad financial situation, which could lead to its closure.

Another advantage of obtaining workers’ compensation insurance for your business is that it keeps you in compliance with state workers’ compensation rules.

The Differences in Workers’ Compensation from State to State

Workers’ compensation laws differ from one state to the next. Some states allow private insurance companies to buy workers’ compensation insurance. However, others have state-run institutions that provide coverage.

Except for New Jersey and Texas, most states require firms to have workers’ compensation insurance. Insurance sales reps and real estate salesmen, for example, might be exempt from state workers’ compensation rules.

Other components of workers’ compensation insurance may differ by state. Some states do not compel businesses to offer workers’ compensation to family members who work for them. Conversely, other states declare that if a business has fewer than five employees, it does not have to acquire insurance.

Workers’ Compensation Insurance Covers Certain Injuries

Workers’ compensation insurance covers employee injuries while they are on the job or acting on behalf of their company. Workers’ compensation also covers injuries that happen on the job as a result of workplace violence or a natural disaster. Additionally, workers’ compensation insurance will sometimes cover diseases. However, this is only true if the condition was because of exposure to something hazardous at work.

Sprains of the muscles are among the most prevalent workplace injuries. The second most common cause of injury is slips, falls, and trips.

Types of Injuries that Workers’ Compensation Insurance Doesn’t Cover

Not all job illnesses or injuries fall under workers’ compensation insurance. If an employee receives an injury as a result of an altercation that he or she started, the insurance will not cover the injury. Injuries occurring while the employee was under the influence of drugs or alcohol are not part of the coverage. 

Additionally, self-inflicted injuries will not receive coverage. Emotional trauma is usually not under the insurance unless it is part of physical trauma. Furthermore, accidents that occur while the employee is commuting to or from work are not covered under workers’ compensation insurance.

Workers’ Compensation Insurance is a Legal Requirement for Businesses 

Some people believe that if a company just hires office workers, workers’ compensation isn’t necessary. This isn’t correct. Although premiums for workers’ compensation are higher in more dangerous industries, this does not indicate that “safe” workers are exempt from coverage.

You may be just beginning your business. You may have less than five employees. However, if you have more than five employees who are not family members, your state law requires you to obtain workers’ compensation insurance.

You may think that the concept of purchasing workers’ compensation insurance is a bit absurd. However, if you intend to hire more people to expand your business, you must begin planning for this insurance as soon as you possibly can. Cerity can help.