Are you a business owner with more than three employees? If so, you know that providing a safe work environment is of paramount importance in maintaining a productive work environment. But even in the safest environments, accidents may still happen, and in case they do, you will need to be carrying workers’ compensation insurance for your sake and the sake of your injured worker. Workers’ compensation is often required by law. It will protect your business, and it will also protect your employees.
It’s Generally Required By Law
Workers’ compensation insurance covers medical care expenses and rehabilitation costs for employees who sustain injuries during work. This happens to be a mandatory policy that forms part of the social contract that is in every state’s laws. The compensation system, however, is not uniform across all states. In many states, employers with few workers, either below five, four, or three, depending on the specific state’s laws, are exempted from compulsory coverage laws. Lack of a compensation system could leave you open to criminal investigations and, consequently, legal complications that might result in financial hemorrhage.
It Protects Your Business
Without a compensation system, a business can be subject to lawsuits by employees or their families for workplace injury or illness, and possibly even death. In most workers’ compensation policies, employees are barred from suing co-workers or employers for additional financial benefits in case of accident or injury. According to Legally Mine, the average cost to small- to medium-sized businesses for employment-related claims involving defense and settlement payment is $125,000. However, with the compensation insurance, you will not need to pay such hefty amounts, and you will have peace of mind as you carry out your business operations. Since the compensation system will take care of your employees’ medical bills, your business finances will be safe.
It Protects Employees
A workers’ compensation system also benefits the workers by covering the medical bills associated with the treatment of injuries sustained during work as well as rehabilitation expenses. CG Insurance explains that this type of coverage works to benefit employees and their families. In the case of an employee being unable to work following a work-related injury or illness, the insurance will cover the cost of wages during the worker’s recovery period— shielding the individual from economic loss. If the injuries lead to permanent impairment or long-term health issues, impairment benefits are also provided by the insurance.
Workers’ compensation is an important aspect of any business. Besides it being a requirement by law in most states, it protects the employer from lawsuits and associated costs. Also, it helps the injured employee take care of the medical expenses as well as the time needed to recover. This ensures income continuity.