Numerous insurance types are available for small businesses. These insurance types include:
- General liability and workers’ compensation insurance
- Small group health insurance and
- Umbrella insurance.
Also known as workers’ or workman’s comp, workers comp insurance for small businesses is a way that small business employers can use to protect their employees from expenses associated with job-related illnesses, injuries, and accidents.
What is workers’ compensation insurance for small businesses? In order to gain a better understanding, let’s review the following sections.
Do You Need Workers’ Comp Insurance?
Workers’ compensation insurance is required by law for most businesses with employees. However, it depends on your state’s requirements and your line of work. While the number of workers you have is a key factor regarding whether to have workers’ comp, it isn’t the only consideration. It provides coverage for:
- Lost wages
- Costs for job-related illnesses and injuries.
Small businesses with at least one employee, whether part-time or full-time, are required in many states to carry this type of coverage. Personal health insurance won’t cover work-related injuries or lost income if any worker is hurt on the job and not able to work for a given period. A workers’ comp insurance policy ensures you, as well as injured employees, that they are covered for disability and medical expenses during the recovery process.
In addition to assuring, you and your employees are protected against work-related illnesses and injuries, a worker’s comp insurance policy also helps in cases where:
- Workers who’re injured or become ill while at work decide to sue your company. Subcontractors and part-time employees should also be covered because they can sue you for personal injuries and medical expenses if they become ill or hurt themselves at your business.
- Employees who need extended medical care as a result of their workplace illnesses or injuries are covered for the costs they incur, including rehabilitation expenses and physiotherapy.
- If a workplace illness or accident leads to the death of an employee, a workers’ comp insurance policy can pay for funeral and burial expenses. Similar to a life insurance policy, workers’ comp insurance offers financial benefits to family members.
That means by purchasing workers comp insurance, your small business is covered for the financial liability for paying for these costs out of its own pocket. This is a big advantage since new companies and private ventures, by and large, run on restricted monetary assets.
Each state has different rules about workers’ compensation. You need to check how a workers’ compensation insurance policy for small businesses works in your state.
What is Excluded from a Workers’ Comp Insurance Policy for Small Businesses?
As a small business owner, you need to know that workers’ comp doesn’t cover all injuries, accidents, or illnesses that occur during the time of employment. Some of the accidents excluded from workers’ comp are:
- Accidents and injuries that occur while your employees are on their way to and from work
- Self-inflicted or intentional injuries
- Injuries sustained when engaging in recreational activities even if they happen in the workplace
- Injuries suffered while the worker is under the influence of forbidden substances or intoxicated
- Food poisoning that occurs while the worker is on lunch break since breaks aren’t considered job-related
Other factors might also cause a workers’ compensation claim to be denied. However, the majority of them can be avoided. Additionally, federal employees are protected by the Federal Employees’ Compensation Act, workers’ compensation does not apply to them.
How Can You Find the Best Workers’ Comp Insurance Companies for Small Businesses?
While looking for a top-rated workers’ compensation insurer that melds seamlessly with the particular demands, needs and requirements of your company it is important to look at some important attributes. These attributes can act as the perfect guide for small businesses trying to choose which workers’ comp coverage provider offers the best protection. These characteristics might serve as the ideal guide:
- Claims handling: It should ensure all claims are handled professionally – in a timely, fair, and consistent manner.
- Customer support: Offers good quality and efficient care.
- Coverage: Provides robust coverage choices that meet the varying requirements in every jurisdiction.
- Communication: Always communicate relevant details of workers’ comp insurance on time and clearly.
- Competitive prices: Businesses must get the best value for their money. The insurance provider must not offer the lowest rates to be competitive.
- Underwriting experience: Provides tailored and flexible coverages designed to meet any business’ unique needs and requirements.
- Risk mitigation: Allows businesses to identify potential threats and enables them to reduce the effect of these on all of their operations.
- Online access: Features user-friendly digital channels that enable businesses to access different features of their policies irrespective of their location.
- Range of products: Features a vast array of solutions accommodating different industries.
As a small business owner, you need to budget for workers’ comp insurance even if you have only one employee. Finding the best provider to assist you in protecting yourself, your company, and your employees is the most important thing.