If your small business is expanding to the point where you need to hire an employee, you’ll need to read up on federal and state laws regarding workers compensation insurance.Workers compensation is an insurance program set up to provide workers who were injured on the job benefits to make up for lost wages while they’re out taking care of their injury.
Areas it covers include:
- Injuries or loss of limbs
- Illnesses, like emphysema
- Injuries caused at work, like repetitive motion injuries
- Medical treatment
- Rehabilitation needed so employees can return to work
- Lost wages (up to two-thirds of the employee’s salary)
- Death
- Liability insurance for the company for lawsuits filed by injured employees
While it might seem like just one more annoying business expense, offering workers’ compensation can actually protect you from litigation should an employee become injured or sick as a result of the job. Every state but Texas requires companies to carry workers compensation insurance — either through a private insurer or the state, or, the business can elect to be self-insured.
The cost for workers compensation insurance varies by provider and industry (high-risk jobs like roofing or construction carry higher premiums than office jobs, for instance). In addition, a company’s premiums can either increase or decrease depending on the number of claims filed.
Business owners can help reduce claims and lower premiums by :
- Accessing the safety of the work environment by investigating how safe the equipment is, whether it needs to be repaired or replaced, offering safety gear where needed and providing ergonomically friendly office equipment.
- Creating a safe work environment by training all employees on workplace safety, offering updates and tips on workplace safety, and incentivizing employees’ accident-free work.
- Getting injured employees back to work faster.
- Starting an employee wellness program to encourage healthy living and fitness, which should reduce the number of employees injured on the job.