Insurance
How Workers’ Compensation Insurance Protects Businesses

Whatever your size from startup, to small business to large corporate, as a business owner, or CEO your many responsibilities include protecting the company against lawsuits and that includes litigious employees.
Workers’ compensation insurance is for the employee. It provides support with wage replacement and medical benefits when employees are injured at work. There’s a more detailed account of workers compensation explained here.
Although workers’ compensation is technically designed to protect workers, it also provides protection for businesses. It can shield your business from lawsuits filed by employees who claim that you or an employee you hired caused an on-the-job injury and also fines.
Protects The Business From Fines
For starters, it protects you from fines. All states, with the exception of Texas, require businesses to have workers’ compensation insurance.
If an employer fails to obtain Workers’ Compensation insurance, they are subject to administrative fines and potential criminal liability and premium penalties and may be ordered to close business until insurance has been obtained and will be held financially responsible for all costs arising from a work-related injury.
The quote above is from Jason D. Mills & Associates
With adequate workers’ compensation insurance cover your business can also be protected in other ways let’s look at a couple of them.
Limits Legal and Financial Liability – Work-Related Injury or Illness
Employees get extensive cover including: medical care for illnesses or injuries; vocational training, income replacement, funeral expenses and death benefits if the employee is killed on the job; and in return employees are prohibited from suing employers for on-the-job injuries, except for cases of gross negligence that leads to an employee’s death.
When your business has the right level of cover, it’s not liable for:
- Medical costs
- Lost wages
- Fines for not having coverage
- Damages incurred by the employee, which may include pain and suffering, punitive damages and loss of life enjoyment
Gets Employees Back to Work
Workers’ compensation ensures that workers receive the medical care and rehabilitation they need to get back to work.
Thus when an injured employee’s needs are met, they are more likely to remain in the job and with the company so it’s a win win for all parties.
An absent worker no doubt puts more pressure on everyone in the business, especially if it’s a small business. Ideally a temporary hire can fulfil the role in the interim.
Implementing an effective transition program, is also wise as it will speed up the the injured employee’s return to work while ensuring they are able to handle all their tasks safely.
Summary
With adequate workers’ compensation insurance, employees have the security and peace of mind that they will be taken care of if they are injured on the job.
For businesses irrespective of size, having the right level of coverage is professional and it shows that you are a responsible employer who cares about your employees.
Not all states in USA make the cover mandatory so if your business is located in a state that doesn’t require it,
your business will be attractive to new staff hires and secure employee loyalty.
- Social Media3 years ago
Top 5 Advantages and Disadvantages of Social Media Marketing
- Management8 years ago
The man who destroyed his multimillion dollar company in 10 seconds
- Management3 years ago
The Five Common Materials Used to Manufacture Reusable Grocery Bags
- Management8 years ago
If you fail to plan, you plan to fail
- Management3 years ago
Unexpected Death of a Business Owner: What Happens Now?
- Accounting & Finance8 years ago
Do You Have a Poverty Mentality?
- Management8 years ago
Workforce Planning – Balancing Demand and Supply
- Management2 years ago
Have An Eye for Eyewear? Here’s How to Start Your Own Optical Business
- Innovation4 years ago
5 Ways How Globalization Impacts Small Businesses
- Management3 years ago
7 Essential Tips For Opening a Mechanic Shop
- Management3 years ago
The Importance of Presentation Skills in Business
- Management3 years ago
Pros and Cons of Offshoring