Workers’ compensation insurance protects employees. It guarantees financial support in the unfortunate event that an injury occurs. If you are a business owner and you have employees, you are responsible for purchasing workers’ compensation insurance. If you don’t, you could put your livelihood in jeopardy and may find yourself having to contact a personal bankruptcy lawyer. Read on as we answer some common questions regarding workers’ compensation insurance.
Who Is Protected
Workers’ compensation insurance protects you as a business owner, and it also protects your employees. If your employees are injured while on the job, workers’ compensation insurance covers the employee for lost wages and medical bills. If your employee receives a payout from your workers’ compensation insurance company, he or she will be less likely and able to sue you as the business owner for the workplace-related injury.
Who Needs It
Although the law varies from state to state, in most cases, workers’ compensation is one of the types of insurance policies businesses need. Even if you are a sole proprietorship with employees who work at desks, you may undergo penalties and fines for not having insurance. There are some exemptions to this rule. Some farm workers, seasonal workers, or domestic employees may not have to be covered by workers’ compensation insurance. Without proper protection, a lawsuit could completely ruin your company finances. In fact, it could put your company entirely out of business. Decide if you need workers’ compensation insurance to avoid having to hire a personal bankruptcy lawyer.
Your employees’ health insurance may not pay hospital and doctor bills for injuries that happened in the workplace. You can offer gap health insurance to your employees, but they still need workers’ compensation. If an accident happens on the job site, and the business owner has not purchased workers’ compensation insurance, the medical bills should be paid for by the business owner.
Business owners who own construction companies or fishing companies and other companies with high rates of injury have to pay higher premiums for workers’ compensation insurance than companies that have few workplace accidents. You, as a business owner, need to report the injury to the insurance company. Once the wound is reported, an insurance company representative will ask you to cooperate in an investigation of the incident that caused the damage. Then, they will explain the insurance costs.
Your insurance company will not pay for the lost wages and medical bills of your employee if the injury was self-inflicted or resulted from a fight that your employee started. Your employee will also not be paid if he or she was under the influence of drugs or alcohol when the injury occurred. When employees make medical claims, investigations occur to ensure fairness.
Although business owners need to respond to all workplace injuries, workers’ compensation does not cover all potential lawsuits that deal with injuries. This varies from state to state. You may also need to purchase employer’s liability insurance as well. Don’t just assume that you have covered all your bases if you have workers’ compensation insurance for all of your employees. Talk with a workplace insurance expert to make sure you have adequate coverage.
Finally, business owners need to know that their state effects their workers’ compensation insurance requirements. Your state could have a different policy than your neighboring state. State policies play a major role in accident report timelines. More so, they determine the penalties associated with failing to report accidents on time. When business owners move their companies across state lines, they often fail to recognize these differences. In the past, they could have had ten days to report claims. However, their new state could demand employers to file claims within seven days. When they fail to file within the particular time frame, they risk getting hit with penalties. Avoid unnecessary complications by staying up-to-date with your state policy for workers’ compensation insurance laws.
Businesses need workers’ compensation insurance to avoid legal disputes. To effectively obtain this type of coverage, understand who receives protection from it. Determine why you need it. Budget your finances accordingly so that you can pay the insurance costs. Learn the injury report rules to effectively file claims with your insurance company. Necessary investigations often occur to guarantee fair outcomes. Contrary to what some believe, workers’ compensation does not cover all types of lawsuits involving employees. Lastly, state policies impact insurance requirements. Keep these workers’ compensation insurance factors in mind throughout your business ventures.