Workers’ comp insurance protects you and your employees in the event of a workplace injury or illness. It helps your team members to afford the medical care they need, pays for lost wages, and protects your finances as an employer.
Still, it can be notoriously difficult to figure out. In this post, we’ll fill you in on the most important workers’ comp requirements that you need to be aware of as a business owner.
Is Workers’ Compensation Required?
The first question many business owners often have is, “Do I need workers’ compensation?”
Here’s the deal: if you’re a for-profit business with employees – and even the majority of non-profits – you’re usually required to have workers’ comp.
If you are a sole proprietorship and are the only employee at your business, or are an individual in a business partnership, you do not have to carry workers’ comp.
Check out this helpful post to learn the specific workers’ comp requirements in your state.
Some states require companies in certain industries like construction to have workers’ compensation no matter the number of employees. However, other state laws stipulate you must only have workers’ comp if you have three or more employees.
Know your state’s specific requirements to avoid disaster.
Understanding Coverage Limits
Next, let’s talk about the coverage limits for small business workers’ comp.
Understand that the Standard Workers’ Compensation insurance policy (as established by the NCCI) does not have a limit when it comes to primary coverage.
This means that the insurance company has to pay for all the claims an employer makes for workers’ compensation. In a sense, this means that the insurance company you work with, not you as the employer, will be responsible for the liability.
This makes it easier for you to budget, as you’ll pay the standard monthly cost of the insurance policy.
However, the employer’s liability coverage – which is also a part of the standard policy – is key, too.
Here, there is a dollar limit amount, because this section relates to workplace harm, illness, or accidents that aren’t subject to federal and state regulations regarding benefits.
How to Lower Workers’ Compensation Costs
You might be eligible for certain workers’ compensation credits in your state and always collect audit paperwork when a premium is determined.
Above all, do what you can to make your workplace as safe as possible.
See this site to learn more about how hiring an attorney to help you choose the right workers’ compensation policy – and be on your side if an employee files a workers’ compensation claim against you.
Never Overlook Workers’ Comp Requirements
Workers’ comp requirements can sometimes be tricky to understand, but they’re also one of the most important things you need to understand in order to protect yourself and your employees.
Need more tips on the kinds of workplace insurance you might need? Have questions about how to set up your own LLC?
Our blog is here to offer you the business advice you need to grow and succeed as a smaller company. Keep reading our posts to expand your knowledge.