The Importance of Worker’s Compensation Insurance for Small Businesses

The Importance of Worker’s Compensation Insurance for Small Businesses

Insurance is a great way to protect your business. For small businesses, it can also be a great way to protect your personal assets. However, you do not want to have too much insurance, because then you waste money in premiums. So, many small businesses wonder if they should have worker’s compensation insurance.

The answer is yes.

Worker’s compensation insurance protects you and your employees. It provides coverage for people who are injured or become ill as a result of their work. While it is not required in all states, most states do require it for at least some industries. However, even if it is not required, it is a good idea. That is because worker’s compensation insurance can protect you from tort lawsuits. Employees can claim under worker’s compensation without having to sue you. It can also limit your liability.

One of the great things about worker’s compensation is that it does not imply fault. If an employee has a work-related illness or injury, they do not have to show fault to get coverage. That means that you can agree to a worker’s compensation claim without admitting fault, as well. Generally, as long as the employee is covered and the illness or injury is work-related, worker’s compensation will cover it.

Worker’s compensation covers more than medical expenses. It can also cover disability payments, costs for rehab, and death benefits. For employers, it also covers your legal costs related to lawsuits for workplace injuries.

Another great thing about worker’s compensation insurance for small businesses is that it is affordable. Rates are based on the type of industry. So, if you are in a low-risk industry, then your rates will be low. Even if you are in a high-risk industry, because worker’s compensation limits recovery in a way that general liability insurance cannot, you can get more coverage for lower premiums.

However, there are some downsides to worker’s compensation plans. They may have caps that limit recovery amounts. They do not cover all injuries, including injuries that are self-inflicted, caused by drug or alcohol usage, or caused by an employee’s reckless or criminal activity. That can leave you exposed, which is why you want to combine a worker’s compensation policy with a general liability policy.

Categorized in: Blog, Business Insurance, Workers Compensation Insurance