While most business owners are aware of workers compensation insurance, many of them don’t know what it entails and the guidelines surrounding it. For those who are in the process of starting a new business or simply need a refresher, here’s a simple breakdown of workers compensation.
What Is Workers Compensation Insurance?
Also known as workman’s comp, workers compensation protects your business in case an employee is injured or becomes ill because of work activities. This can range from a factory employee getting injured by heavy machinery to a data entry clerk developing carpal tunnel from a heavy typing workload. Your policy can pay for medical expenses, rehabilitation costs and lost wages while employees are unable to work.
When is Workers Compensation Required?
Now that you know what is workers compensation insurance, when exactly is it required? The truth is it’s not a simple answer as the requirements vary depending on the state, industry, business size and structure. Some states require that businesses with at least one employee, whether full or part-time, carry workers compensation while others have a higher threshold. Visiting your state’s department of labor website can provide more clarity into their requirements.
Carrying workers compensation may be optional in certain instances but should be seen as a requirement for business owners who want to keep themselves and their employees protected from financial loss. Work with an experienced agent to ensure that your policy satisfies your business needs as well as your local regulations.