Workers compensation is a social insurance program designed to resolve disputes between injured employees and their bosses. Prior to the advent of workmans comp, those injured on the job took their employers to court to get remuneration. This led to clogged-up dockets and bitter fighting between bosses and the rank-and-file. The workers compensation arrangement was set up as a grand bargain of sorts. Employees gave up the right to sue their bosses (in most cases) in exchange for "no fault" protection. In other words, hurt workers did not have to prove that a company was at fault or negligent in order to collect benefits.
Workers Compensation Basics
Regulations concerning workmans comp differ from state to state. Most businesses – even minor ones – should get coverage. Indeed, if you employ four or more people, you almost certainly will be legally required to get coverage to pay for medical bills, wages lost, and other expenses if one of your employees gets hurt on the job. Workers compensation insurance covers both acute and chronic occupational injuries and diseases.
An example of an acute injury: A construction worker falls through a metal grate and wrenches his knee, necessitating emergency surgery and long-term orthopedics.
An example of occupational injury: A secretary suffers repetitive stress injury to his thumbs after typing eight hours a day for 12 years; he has to undergo surgery, therapy, and rehabilitation.
Insurance to Consider in Addition to Workers Comp
Workers compensation won't protect non-employees. And your workers can still sue you in certain instances – for instance, if your gross negligence leads to an injury. Other coverages to consider include: general liability, business interruption insurance (to protect your income stream if your business shuts down because of a calamity), disability coverage, and business auto coverage. To simplify your shopping, consider getting a business owners policy (BOP) – a package of coverages wrapped into a single policy.
Getting Costs Down
Don't skimp when it comes to procuring workers compensation coverage. As discussed above, if you skimp, you could violate the law and suffer financial penalties. Discuss loss control tactics with your insurance agent to figure out specific ways to optimize your operation to eliminate onsite risks. Lastly, shop around for better coverage. Get at least three quotes.
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