Most states require employers, including small business owners, to purchase workers’ compensation insurance for their employees. Regardless of the number of employees, size of the business, or revenue, small business owners are expected to ensure that their workers are covered by workers’ compensation insurance.
What Is Workers’ Compensation?
Employers are legally obligated to do everything within their power to make sure that the workplace is safe, but regardless of the number of safety precautions that are put in place, one cannot entirely prevent accidents from occurring. This is why workers’ compensation became indispensable. Workers’ compensation, or workers’ comp, is a form of insurance that covers the medical bills and lost wages of an employee who got injured or became ill while on the job. Workers’ comp is regulated by states. Hence, the requirements, limits, amount of compensation, and all other specificities are determined by the statutes in place in each state.
Workers’ compensation is a “no-fault” insurance policy. This means that a worker is eligible to receive compensation for any work-related injury regardless of who’s at fault. This remains valid even when the worker is responsible for their own injury.
When Is the Employee Not Entitled to the Benefits of Workers’ Comp?
The “no-fault” system of workers’ comp ensures that employees are covered whether or not their employer is directly liable for their injuries. However, there are certain circumstances under which a worker can’t file a workers’ compensation claim. They include:
- If the injury was self-inflicted or was incurred while the worker was intentionally trying to harm another worker.
- If the worker was under the influence of drugs or alcohol when the accident occurred.
- If the employee incurred the injury while engaging in horseplay at work.
- If the accident leading to the injury occurred as a result of the worker acting in direct violation of the company’s rules.
When Should I Get Workers’ Compensation?
As a small business owner, it’s best that you purchase workers’ compensation insurance as soon as you begin to employ workers. Workers’ comp not only covers injured workers but also protects you, the employer, from being sued for the worker’s injuries. This can go a long way in preventing your small business from losing a lot of money to lawsuits.
The employee limit for workers’ compensation is determined by state laws. Most states demand that employers with one or more employees should have workers’ comp. Your surest bet is to check with the laws of your state to know when it becomes compulsory to buy workers’ compensation to assure you’re in compliance with applicable laws.
How Much Does Workers’ Compensation Insurance Cost?
The cost of workers’ comp varies across different businesses. This is because several factors contribute to the final premium that a business has to pay for workers’ compensation. Typically, premiums are higher for employers whose workers face a higher amount of risk in the workplace. Thus, construction companies will pay more than marketing firms. Payroll also plays a role in determining premium cost. The higher the payroll, the higher the premium.
If you have questions or need help with workers’ compensation for your small business, contact our team of experts at Weeks & Associates Insurance Services in Thousand Oaks, California. We’re ready to meet all your coverage needs today.