Workers’ comp protects you and your workers. It guarantees wounded workers lost pay and treatment regardless of culpability. Employers are protected from costly worker injury claims. In most jurisdictions, having employees requires workers’ comp coverage. Whether you’re a well-established company or a new business, you must know when to get workers compensation.
Workers’ compensation insurance is usually required as soon as you recruit your first employee. Not only is it the law, but you should get coverage as quickly as possible. Even if you are a lone entrepreneur, you may need workers’ compensation. Depending on your state, you may require it for a contractor license. Without it, you’ll have to foot the tab because your health insurance won’t cover work-related injuries or illnesses.
Workers’ compensation legislation violations might result in civil or criminal fines.
How your business location influences whether you need workers’ compensation insurance
State workers’ comp regulations vary. You must know the state workers’ comp laws where your firm works. You will need to obtain coverage depending on the regulations of each state where your workers operate if your firm is headquartered in one but has employees in another.
When you require workers’ comp insurance depends on your staff count. In several states, employers must carry workers’ comp. In others, it’s two, three, or five. So even if they’re business officials or family members, they’ll need to be protected.
Workers’ compensation insurance requirements and exclusions vary by state.
Some states mandate coverage for construction and roofing workers.
Some firms require independent contractors to get workers’ comp to lessen their liability. Even if not required by law or contract, you may want to get workers’ compensation to pay medical expenditures and missed earnings if you’re injured on the job.
Do Part-time Employees Require Workers’ Comp?
If your state requires workers’ comp for full-time workers, it likely also applies to part-time and seasonal workers.
Do Subcontractors Need Workers’ Comp?
According to your state’s definition of an employee, subcontractors may be required to purchase workers’ comp. Your state may also mandate you to supply this coverage even if your subcontractors already have it.
Should You Acquire Non-Required Workers’ Comp?
Buying workers’ comp insurance may be in your best interests, whether or not it’s necessary. You’ll need to budget for workers’ comp insurance, but the premium is likely to be cheaper than medical bills incurred on the job.
Workers’ comp protects both your employees and your business. Workers’ compensation covers medical treatment, continuing therapy, and lost earnings for injured workers. Workers’ compensation pays death payments and a share of funeral costs if an employee dies on the job.
Workers’ comp reduces company owners’ lawsuit risk. Most workers’ compensation policies contain employer liability coverage in case an employee sues you for carelessness. After a workers’ comp claim is settled, the employee can no longer sue over that injury or sickness. You’re safe from costly legal action.
What Happens If You Don’t Purchase Workers Comp Insurance?
In most jurisdictions, not having workers’ comp insurance can result in fines or stop-work orders. In some places, you might face misdemeanor or felony charges and jail time.
If your employee is harmed and you don’t have workers’ comp, you’ll be responsible for medical bills, missed earnings, and other benefits.
According to the National Safety Council typical workers’ comp claim costs $40,000. Workers’ comp is a better value for your business. Small company owners may buy it even if it’s not necessary.