5 Things to Know About Worker’s Compensation Insurance

Workers’ compensation insurance and surety bonds are some of the most crucial coverage components for any business. Besides ensuring a safe work environment for employees, a policy can protect workers in the event of an accident and it can protect the company from lawsuits. Workers’ comp provides benefits to employees regardless of fault, and it offers other benefits as listed here.

Laws Vary by Jurisdiction

Workers’ compensation is regulated by the state government, and requirements vary by location. Governing boards oversee the state’s workers’ comp system, and they monitor actions taken against companies that lack this important coverage. Some states have public funds, but in most cases, companies are required to carry this coverage.

Workers’ Comp Covers Every Employee

Contrary to popular belief, workers’ comp isn’t just for bigger businesses. Even if a company only has one employee, it is still possible to buy worker’s compensation insurance. By including it in a business insurance policy, a company owner can ensure protection for disability, lost wages and medical bills if an employee is injured.

It Covers Non-Physical Injuries

When clients think of on-the-job injuries, they typically think of physical harm. However, workers compensation insurance covers chronic illnesses and psychological trauma resulting from at-work incidents. Employees exposed to toxic chemicals, or those who have experienced work-related trauma, can file a claim for worker’s compensation.


It is Relatively Affordable

Some business owners think they can save money by opting not to buy workers’ comp insurance, but this cost-cutting measure can be dangerous. While a policy requires an investment, it is much cheaper than a substantial damages award. It may cost money upfront, but it can help companies save in the long term.

Employers can be Personally Sued if the Company Lacks Workers’ Comp

Even if the business is small, an accident can lead an employee to file a suit against the company or the employer. If such a suit is filed, the employer could find themselves personally liable for damages. Large settlements can even put a small, struggling company out of business. Workers’ compensation is a type of small business insurance that offers business owners protection against these situations.

There’s no more important kind of business insurance than workers’ comp coverage. It protects employees involved in accidents, and it protects businesses from damaging claims and high settlements. Business owners should learn the state’s laws on workers’ compensation and they should buy a policy that complies with the law while meeting the company’s needs.

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