Workers’ compensation – when does your business need it?

You've put endless hours, effort and hard work into building your business to where it is today. Whether you have many employees or are gearing up to hire your first team member, workers' compensation insurance is an important way to protect both your employees and all of the hard work you've put into your company. Because accidents can happen anywhere, regardless of the type of business you own, workers' comp is important for every business owner to obtain.

What is workers' compensation?
In the event that an employee of yours suffers a work-related injury or illness, workers' comp helps protect your business and employees by covering things like missed wages, medical expenses, compensation for fatalities and any lawsuits related to the work injury.

As the employer, workers' comp reduces the risk of being sued by an injured employee. You will also avoid having to pay out-of-pocket for their medical expenses or loss of wages during recovery after a workplace incident.

On the other hand, it benefits your employees by providing financial protection and medical care if they are injured on the job. Coverage provides a safety net for your employees so that they can get the health care and compensation they need to heal and get back to work.

Workers' comp is required in most states, regardless of the type of business you own.

Who needs it?
In 2020, 2.7 million nonfatal workplace injuries occurred, according to the Bureau of Labor Statistics. Even the safest work environments are prone to accidents, which makes it important for any business owner with employees to buy workers' compensation insurance. In fact, most states require it by law.

Every state has different workers' comp laws so you should look at what your individual state requires. For some, the number of employees your business has determines when you will be required to carry workers' comp insurance, while others require it as soon as you hire your first employee. Whether you have full-time, part-time, permanent or temporary employees, many states make it mandatory to have all types of workers covered. This means that even if your employees don't receive health benefits, they will most likely still need workers' comp coverage.

Keep in mind that several states have large penalties for not adhering to coverage requirements, so become familiar with what is required before bringing your first hire onboard.

How to go about getting coverage
There are many simple avenues to obtain workers' compensation insurance for your business. You can work with your current insurance agent or go online to find coverage that works for you and your business. Things that will be taken into consideration that will ultimately affect the cost and how much coverage you'll need include the number of employees, what types of employees you have, the type of work they do and the laws of your state.

Along with the right insurance to cover your employees and keep your business protected, it's wise to have the right legal representation in place. Contact The Law Offices of Donald W. Hudspeth, P.C. to learn more about how to protect your business and employees in the event of a workplace accident.

Categorised in: Starting a Business in Arizona

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