Accidents happen! They occur even in the safest and cleanest work environments, which is why you must have insurance.
Workers’ compensation insurance protects you, the employer, against lawsuits resulting from work-related accidents, providing medical care and compensation for lost income to your employee(s).
The coverage is designed to ensure that employees who are injured or disabled while on the job receive proper compensation, negating the need for lawsuits regardless of who is at fault. Dependent coverage for workers injured, or even killed by work-related accidents and illnesses, is one of the many benefits of workers’ compensation coverage.
Imagine this scenario: Jessica Park decided to open a small self-storage facility. In the beginning, she was the only person running it. When she purchased her business insurance, she told her agent she didn’t need workers’ compensation coverage because she managed the site, and didn’t mention she may hire employees in the near future. As business picked up, she continued as manager, but hired two full-time and two part-time employees.
Is there a problem in this scenario? Probably. Workers’ compensation laws vary by state, and most states have some form of statute or requirement regarding coverage. Businesses that meet certain criteria must provide workers’ compensation for all employees, or face fines and consequences.
In nearly all 50 states, you are required to cover your employees for workers' compensation. Remember, your general liability coverage has exclusions relating to injury to anyone who should be covered under workers’ comp. Therefore, this important coverage must be considered a mandatory part of your insurance portfolio.