Worker’s compensation is something that most people don’t think about until it is too late. That is because a lot of people don’t understand what it is or how it works. A lot of small business owners struggle to understand worker’s compensation, too. Worker’s comp is “on-the-job” insurance. It provides benefits to employees for work-related injuries or illnesses. This includes reasonable expenses for medical care, wages from lost work time, disability benefits, and survivor or death benefits. As a business owner, a worker’s comp policy can even reimburse you for certain expenses if you get sued.
When an employee gets hurt on the job or has a work related illness, they still have to pay their bills and meet other financial obligations. That’s where worker’s comp comes in. Health insurance won’t pay the rent, utilities, or for medical deductibles. Worker’s comp, however, can help with these expenses. Depending on which state you live in, full or part-time employees can be covered by worker’s comp, and in some states business owners, partners, or company officers can be covered as well. Coverage is even available for workers injured while traveling on business outside of the state where they normally work. As a business owner, the rates that you pay will depend on the type of business you are in, your worker’s comp track record, and how much you pay your employees.
Whether or not your business carries worker’s comp coverage may not be a choice because it may be mandated by law, but you do have power over the decision over who you purchase worker’s comp insurance from. Rates and coverage can vary, and the rules and requirements vary from state to state. The same price may get you different levels of coverage from different companies. That’s why it is important to ask questions from different providers, compare coverage, and look at the reputation of the company from whom you want to purchase coverage. Fifty-four percent of the costs of claims are for medical expenses. It is crucial to be careful about who you choose to manage these claims. The more you understand as a business owner, the more confident you will be in your worker’s compensation insurance buying decision, a decision that could mean a lot to your business, and to your employees.
Worker’s Comp Tips for Business Owners
- If you have a claim, big or small, report it right away to help your employees get the care they need and to protect you in case their injury turns into something bigger down the road. The sooner they are healthy, the sooner your employees can get back to work for you.
- Audits aren’t a bad thing. The purpose of an audit is to make sure you are paying the right premium so that you don’t pay too much or too little, and that you have the coverage you need. The result of an audit could even be a refund. Something as simple as a safety program or ergonomically designed workstations can be suggested and implemented to lower your premiums.
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