Workers compensation insurance provides cash or medical benefits to employees who are injured on the job. While you are just starting a business, you probably do not have to worry about paying for this insurance. Unless, you would like to cover yourself as an employee. However, once you start hiring other people as employees, it will be increasingly necessary to have a workers’ compensation policy in place. While some states do not require workers comp, most have mandatory laws in place. As the business owner, you are responsible for ensuring that the company pays for this insurance which can offer protection in the event of an incident. To learn more about how workers compensation protects your business, keep reading below.
Employee Accidents Or Injury
If an employee experiences an accident at work, workers compensation can help cover the medical costs associated with the accident. The policy will also cover the lost wages that employee incurs as a result of the accident or injury. For example, if an employee were unable to work for a month, the policy could cover the wages over that period of time. Securing a policy, you can protect your business from having to pay out these wages. An accident or injury can be an expensive event that workers’ compensation can protect you from.
Injury Lawsuits Against Your Business
Secondly, workers’ compensation can protect your business from injury lawsuits. The cost of an injury lawsuit could bankrupt many small businesses. However, workers’ comp comes with another part of insurance called employer’s liability insurance. This part of the policy would cover attorney’s fees, court fees and judgments settled against your business. Of course, each employer’s liability insurance policy has a limit of damages according to your business’s coverage. However, the policy limits are usually set high enough to offer significant protection to the business’s overall financial stability.
Job-Related Illnesses And Long Term Injuries
Furthermore, illness compensation can protect your business from long term costs associated with permanent injuries and illnesses. If there are long term diseases developed at work, workers comp can cover these costs too. Medical treatments for diseases like carpal tunnel syndrome or chronic back pain may take many years to heal, if at all. Obviously, a long term cost like this could drain your company’s cash flow. However, the insurance policy would protect the company from this type of long term risk and liability.
Support Managing Claims From Employees
In addition to providing financial protection, a workers’ compensation policy can assist in dealing with claims from employees. According to Daniel Noll, a lawyer in Springfield IL, “most work-related injuries must be reported to an employer within 45 days.” Dealing with these claims could cost your business valuable time and resources for administrative tasks. With the help of your insurance carrier, they can take care of the claims process for you. This way, you can spend more of your valuable time running the business while your insurance provider responds to employee workers’ compensation claims. Needless to say, the policy could protect your business from losing valuable resources to keep the business running.
Trust Between The Company And Employees
A workers’ compensation policy establishes a level of trust between your business and employees. They will know that if there is an incident at work, they can claim compensation. Within reason, they will not have to worry about covering the medical bills or lost wages if they are injured at work. When your business is trusted by employees, it improves retention and overall productivity. This is essential to the financial success of a company. The security offered to employees with workers compensation can offer your business protection from low morale or high turnover rates.
Workers’ compensation covers many types of injuries and illness while protecting your business from absorbing the total cost of these events. If an employee is injured or hurt at work, the policy will cover the costs for medical bills or lost wages. It can also cover the costs for long term illnesses and injuries that an employee may suffer. On top of that, if an employee tries to use your company, the insurance policy would cover the legal costs associated with a settlement or judgement. It will also assist your business in managing claims when injuries are reported. More so, the policy will promote trust between employees and the company. These are all important ways that workers’ compensation can protect your business from financial hardship.