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This is one of the policies that a business is required to have, and it is regulated at the state level. As a business owner, you are held responsible if an employee of yours gets hurt while performing their duties, for any reason, including equipment malfunctions. The legal obligations differ per state. Some require that companies above a certain size to purchase such a policy, while other states force every company, regardless of size to be covered.

What does this policy cover?

The vast majority of cases related to:

Medical expenses

The medical bills for this part include the cases of illness which was suffered due to exposure to the conditions of the working environment, as well as on-the-job injuries, loss of limb, even death.

Lost wages

During the time that the employee is in recovery, he or she is losing wages. The insurance pays for these wages.

Legal proceedings

This part covers the lawyer’s fees, the court expenses and all other costs incurred in the process of defending yourself against a claim.

Optional additional coverages

Depending on the nature of your business, you may need coverage for:

  • Employees working in other states
  • Illnesses or injuries that the State Legislature has not imposed mandatory coverage
  • In cases of an employee’s untimely demise, you may opt to provide coverage for the dependents of this employee

Things to be aware of

Many insurance companies providing a policy may require that specific safety precautions are put in place. These precautions may pertain to specific ergonomic equipment and proper training of your personnel on how to use this equipment. Apart from that, there are always clauses in a contract that mention that it is invalid if certain conditions are not met.

You should always maintain safety controls on your premises for things like slippery floors, objects that may fall, objects in the way that may cause someone to trip over, and in general, a clean and healthy environment to work in. You should also invest in protective gear should your business operations include environmental hazards. Not keeping such conditions, may result in you not being protected by your policy and having to pay all the expenses out of your own pocket.

How much would a Workers Compensation Insurance cost?

When an insurance company is asked to provide a quote for a worker’s compensation policy, it takes into account:

  1. The State legislature
  2. The number of employees you have
  3. Your annual revenue
  4. The risks that your company may expose the workers to
  5. Your payroll