If you are getting ready to start a new business, you are probably researching all the laws and regulations you need to know. While doing your research and filling out paperwork, don't forget about workers' compensation insurance. Unless you will be working the place alone or with other owners, you need to purchase coverage for all your employees. Depending on what state your business is in, you may have to buy workers' comp insurance through a state department. If the state does not offer it, you will need to get it through an independent insurance company. You can often have it bundled with your business liability policy. Here are a few things you need to understand about this coverage.
Protects You
While it can be frustrating to have to spend yet more money just to get the business open, workers' compensation insurance not only benefits the employees, it benefits you and the business too. In reality, it benefits you more than the workers. Any time a worker is injured while performing a task for you, the insurance pays the medical bills and a portion of their lost wages. If you did not have the insurance, the employee could take you to court and sue you. In court, they can sue not only for medical expenses and lost wages, but for pain and suffering. Just one lawsuit of this type could end up costing you much more than many years paying for workers' comp.
Your Requirements
In addition to having a current policy at all times, there are other things you must do to remain in compliance with the workers' compensation laws. You will need to have a notice posted in a place where all your employees can see it that details their rights to medical treatment and to file a claim with the insurance company. Because a claim can be denied if the paperwork is not filed in a timely manner, you must also have the proper forms at all times and make sure any forms that you or a manager needs to fill out are completed and turned in before the deadline.
Penalties
If you fail to maintain coverage, an injured employee may sue you. However, you can also be fined by the state. In addition, if the state has a policy that pays for the medical expenses of an injured employee when an employer does not have worker's compensation, you will have to pay the state back any money they paid.
The cost for workers' compensation insurance will depend on where you live and how many employees you have. However, it is important to remember that the premium payments will save you from expensive legal fees and the settlement of an accident that ends up in court.
