How Workers’ Compensation Insurance Helps Your Business
Keep Your Business & Employees Protected
When it comes to ensuring your business is running as effectively as possible, keeping your employees safe and healthy is a top priority. But we know that accidents do still happen, and a minor accident can eventually become a major problem. If an employee is injured on the job, you don’t want to become stuck in a drawn-out legal battle over it. Thankfully, workers’ compensation insurance can help your business avoid that entire process! Workers’ compensation insurance lets your business handle injury-related workplace disruptions in an efficient way and lets your employees get back on their feet after suffering a workplace injury.
1. What Is Workers’ Compensation Insurance?
Workers’ compensation (or workers’ comp) is a type of business insurance that provides medical help and wage replacement to employees who are injured at their workplace. The beneficiaries of workers’ compensation insurance waive their right to sue employers for work-related injuries. In return, they receive guaranteed coverage when they suffer from workplace hazards. Employees also receive compensation for lost wages because of the time spent away from work. The insurance payments employees receive can cover their medical expenses in the result of injury or disablement. However, be sure to keep in mind that workers’ comp is still separate from both disability insurance and unemployment benefits.
2. Who Provides It?
Workers’ compensation insurance must be purchased as a separate policy from a workers’ comp insurer – meaning that it can’t be purchased as part of a business owner’s liability insurance policy. Each state has its own rules about where employers may buy workers comp insurance, but many, including New York, allow businesses to purchase workers’ comp coverage from private insurers. Private insurers will determine the cost of your specific plan based on your industry, claim history, and other factors. So, a business that employs handymen will likely pay more for their workers’ compensation insurance than one that employs clerical workers.
3. Who Has to be Covered?
You’ll need to obtain workers’ compensation coverage only if you have employees – you do not have to provide workers’ comp coverage to independent contractors you hire to help your business. You also do not have to provide all types of employees with workers’ comp coverage. All states exclude certain types of workers from workers’ compensation coverage, though each state varies in terms of exclusions. This typically includes casual labor (workers who only work for your business briefly), and certain types of domestic workers. If your business has fewer than three to five employees, you may also qualify for an exemption.
4. Who Benefits from Workers’ Comp?
The good news is that both small businesses and their employees can benefit from workers’ compensation insurance. For small businesses, workers’ compensation insurance offers a way to avoid expensive court proceedings and other legal processes. Employers can settle their disputes with employees informally by administrative law judges, making the process more efficient and less time consuming. For employees, workers compensation provides added safety to their workplace. Workers that have guaranteed insurance in case of an injury will trust their employer more, and often work more safely.
5. Building the Right Plan
Because private workers’ compensation insurance is an option in New York, it helps to discuss it with a qualified insurance agent or broker. It’s very likely that they can help you save money on your premiums by coordinating your business’s workers’ compensation coverage with other forms of business insurance. At Pardee’s, our talented team can help your small business find the plan that makes the most sense for you, your business, and your employees. We understand that small businesses often can’t offer extensive retirement plans or other perks, but with the right workers’ compensation insurance plan, your employees can still receive worthwhile benefits.