If you own a business, you should strongly consider getting workers’ compensation insurance. This is true whether you’re self-employed or have employees working for your LLC or corporate entity. In some cases, you may be required to carry workers’ compensation insurance, and even if you aren’t it could leave you or your company vulnerable to a significant payout.
What Is Workers’ Compensation Insurance?
Workers’ compensation insurance provides companies and employees with a timely way to settle workplace injury claims. Employees are generally eligible for benefits as long as they were injured performing tasks for their employers. Exceptions may apply if an employee was engaged in horseplay or was impaired at the time a workplace accident occurred. Injured workers are entitled to a percentage of lost wages as well as payment of medical bills related to their workplace injury.
How Much Does Workers’ Compensation Insurance Cost?
The exact cost of a policy depends largely on how much revenue your company makes. Other factors such as a company’s location and industry can also play a role in determining an insurance rate. However, you can expect to pay as little as $500 a year if your business makes less than $100,000 annually to as much as $5,000 a year if your company has revenues of $1 million or more.
What Happens If Your Company Doesn’t Have This Insurance?
At a minimum, you would likely be responsible for covering an injured worker’s medical bills and lost wages on your own. The same would be true if you’re self-employed and don’t have such a policy. In addition, as most employers are required to have this coverage, you could face fines or other financial penalties from state regulators.
The Process of Filing a Workers’ Compensation Claim
There are several steps that are taken when a worker files for benefits. For instance, as an employer, you have the right to ask your employee to see a doctor of your choosing or of your insurance company’s choosing. You also have the right to gather evidence in an effort to challenge the validity of the claim. Once the claim is filed with your insurance company, that entity might further investigate the claim before it is approved.
Workers who are injured on the job have the right to medical care, temporary wage replacement and an assessment of permanent disability. The workers’ compensation system is designed to ensure that workers can get paid quickly without imposing significant burdens on companies. However, without the proper coverage, you could leave your company liable for damages as well as other penalties. You may be able to get coverage through a broker or by asking your preferred coverage provider about any products that company sells.
