Why Companies Should Invest In Worker’s Compensation

Worker’s Compensation

As a business owner, you understand all the risks associated with running a company. You’ve separated your business and personal assets and accounts and created a separate entity to limit your personal liability. However, when you start hiring employees, you should have additional protections in place, including worker’s compensation insurance.

It Protects You

Advisors from Novatae Risk Group will tell you that one of the greatest benefits of worker’s compensation is its ability to protect you. When an employee gets injured on the job, you are technically responsible for that injury, whether that staff member is on your property or driving a vehicle to deliver your products. These individuals, and their families in the case of a death, can sue you for the costs they incur.

Worker’s compensation insurance protects you because it reduces the financial impact on you when an employee gets injured. Instead of you paying all these costs, your insurance company picks them up. You can also gain protection against legal action.

It Protects Your Staff

Like most companies, you likely have a rigorous safety program in your company. You have likely made significant investments in safety initiatives. You implemented training programs, accident investigations, and administration. However, no matter what you do, your employees could still become injured on the job. Even office staff are at risk.

Worker’s compensation insurance steps in when your employees get hurt. They likely cannot pay for the costs associated with an injury or death. Your insurance pays these expenses for your employees. It helps them recover without the stress. It may even pay for retraining or accommodations they need to get back to their life and start working again.

It Encourages Loyalty

Providing this insurance also tells your staff that you care about them and their well-being. It shows that you want to protect them. When you combine this with safety programs and training, your employees recognize your efforts. As they learn more about what you do to protect them, they become more loyal to you. In addition, their job satisfaction increases.

When your staff trusts you, you retain your employees longer, reducing your turnover rate and the high costs associated with this phenomenon.

It’s a Legal Requirement

Most state governments have adopted laws that require worker’s compensation insurance for companies with employees. In fact, companies in every state in the U.S. except Texas have insurance requirements. You could incur severe financial penalties and face criminal charges in some states. Although they may consist of a fine and jail time, your state may have different requirements than the state next door, and the penalties may be vastly different.

Every state has a worker’s compensation department or agency that handles the programs within the state, and they coordinate with the federal government through the U.S. Department of Labor. In addition, some, including Ohio, Wyoming, Washington, and North Dakota, require that you purchase your insurance from a state fund. As a business owner, you should contact your state’s agency to determine your legal requirements.

Worker’s compensation insurance protects you and your workers.

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