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When you run a business, you’re expected to find ways to protect your employees at work. Part of this means buying a business insurance policy that includes workers’ compensation coverage. In fact, most businesses are required to carry this coverage for employees, though the exact requirements vary depending on the size of your business and the state you’re located in. If you’re starting a business, you should learn more about workers’ compensation, including how it works and why you need it if you want to protect both yourself and your employees.

What Is Workers’ Compensation?

Workers’ compensation, also known as workers’ comp, is a type of insurance coverage that gives financial benefits to employees who get injured or ill while at work. These benefits are meant to cover all medical expenses related to the injury or illness, as well as lost wages if they have to take time away from work to recover.

Workers’ comp can even pay for rehabilitation costs if the employee needs long-term assistance, such as learning to walk again after a serious work injury. This allows employees to get all the medical treatment they need until they’re recovered enough to return to work.

Note that in exchange for these benefits, employees must agree to waive their right to sue their employer for negligence if they’re injured on the job. As you can see, workers’ compensation can be beneficial to both employees and employers, making it an important part of your business insurance policy.

What Makes Workers’ Compensation Essential to Have?

If you don’t have workers’ compensation and are not certain that you need it, it’s helpful to get a sense of how exactly it can benefit both you and your employees. These are some reasons to get this type of business insurance coverage:

  • It’s your duty to protect your employees from harm in the workplace, and workers’ comp makes this easy to do by paying for their medical care and lost wages if they’re hurt or become sick at work.
  • Having this coverage in place gives your employees peace of mind that you care for their safety and well-being, improving their morale.
  • You’re likely required to get this coverage, depending on your state laws and business size, so having it can guard against fines and other legal issues.
  • This coverage pays for the costs associated with employee injuries and illnesses, which means you won’t be expected to pay these expenses out of pocket and cannot be sued for them.
  • When your employees get instant medical treatment and rehabilitation help by filing a claim, you minimize the amount of time they must take off work to recover, allowing for business continuity and productivity despite a workplace injury.

Given all these benefits, you can see why getting workers’ compensation is a cost-effective option in the long run. Make sure you include it in your business insurance policy, regardless of the industry you’re in.

What Does Workers’ Compensation Cover?

It’s helpful to know what workers’ compensation typically includes so you can rest assured that your employees are fully taken care of by this type of coverage. It offers the following benefits for injured or ill employees:

  • Medical Benefits: These benefits pay for the cost of medical treatment for your employees’ work-related injuries and illnesses. This may include doctor visits, hospital stays, surgeries, medications, and rehabilitation services.
  • Disability Benefits: If an employee is too severely injured or ill to work for a long time, if ever again, they can get financial benefits through the disability portion of workers’ comp. They can qualify for one of four types of disability benefits: temporary total disability, temporary partial disability, permanent total disability, or permanent partial disability.
  • Vocational Rehabilitation: In some cases, injured employees might need vocational rehabilitation services before they’re able to return to work. This can include job training and placement services.
  • Death Benefits: If a work-related injury or illness causes an employee’s death, workers’ compensation provides death benefits to their dependents, including funeral expenses and financial support.

How Do You Get Workers’ Compensation Coverage?

If you’re interested in buying this coverage for your business, you’ll be glad to know it’s easy to add to your business policy. The first step is finding out if you’re required to get workers’ comp. Check the laws by state to find out if your business needs this coverage.

If it does, start looking for business insurance providers that will give you workers’ compensation coverage for an affordable price. You should first find companies that serve your area and business type, and then reach out for a price quote on this type of business insurance.

Once you get a quote, you should find out how much coverage you will get for it. In general, your premium cost will depend on your area, industry, claims history, and the number of employees you have. Try to compare quotes from different insurance companies before you decide who to go with. Be sure to look at reviews of the company or ask friends and colleagues who they recommend before you choose.

What Should You Do Once You Have Workers’ Compensation?

When you get this coverage, you will have some peace of mind in case employees are ever hurt or become sick on the job. But you should be aware of certain responsibilities you’ll have once you get this coverage.

One is reporting and managing claims. You need to ensure that there’s a clear process for reporting work-related injuries so your staff knows what to do when the worst occurs at work. Have forms on hand for employees and any witnesses to fill out, which you will then file with your insurance provider to start the claims process. Effective claims management on your part will help control costs and ensure injured employees receive the support they deserve.

You also need to help prevent fraud. After all, both employees and employers of companies have been caught defrauding this system to benefit financially. To help prevent this, you need to implement fraud prevention measures, such as requiring thorough documentation and even surveillance when necessary. Ask your insurance provider what their fraud detection process is like and how you can help support it.

Additionally, it’s important to regularly review your workers’ comp policy and update it as needed. Your coverage needs might change as your company grows and evolves with time. If you don’t update your coverage as needed, you may end up with inadequate protection for employees or unnecessary expenses.

Overall, workers’ compensation coverage is critical if you want to protect your business and its employees. Fortunately, it’s easy to add this coverage to your business insurance policy, along with commercial auto insurance, tools coverage, excess liability, and other solutions that will safeguard your business in the long run.