Workers compensation insurance is obligatory in most of the states nationwide. You might have heard the term “workers comp”. It’s actually an insurance policy that will provide total medical for an employee if they get hurt during the job. The insurer will be safe from being sued by the employee.
This policy covers more than just accidents during the job.
It can cover the employer when they have an automobile transport while doing their job. Some of the insurance policies cover illness as well. It also recovers the time when the employee is away from work after getting injured regardless of who actually caused that accident. It also works as a death insurance to family. Each state’s law about workers compensation is different comparing to another state.
How You Will Know If You Need Workers Comp Insurance
Most states requires workers comp insurance by law that W2 employees. California workers compensation insurance is mandatory for companies who have even only one employee. Clients also ask in their contracts that their contractors have workers comp insurance.
Workers’ Compensation Laws for Each State
It’s important that you know the laws governing workers comp as well as your employer rights in your state. Workers compensation is regulated by department of labor, department of industrial relations, and department of employment in each state.
Necessity of Carrying Workers Compensation Insurance if You Don’t Have Employees
If you own a one-person company, you may be living in a state that doesn’t ask you to maintain this insurance policy. But, you client may tell you to carry workers’ comp insurance. Why? In many states like California, unless a company show that their subcontractors is carrying his own California workers compensation insurance, they will be automatically covered with the hiring industry’s policy at the industry’s expense.
What If You Use Contractors Instead of Employees
Leased, contract employees or other work-for-hire type may be free from workers comp insurance requirements, but some state laws still require companies to carry work comp insurance for contractors. If you hire freelance contractors to work for your company, you have to make sure that they carry their own work comp policy.
Advantages of Carrying Workers Compensation Insurance
Work comp insurance provides medical benefits like medication, pay for doctor’s visits, therapy, diagnostic tests or hospital bills that are directly related to an injury or accident that occurred while the employee was doing his job.
They will also reimburse the income that employee lost due to illness or work-related injury. If anything worse happens to employee and he gets killed on the job, the insurance policy will work like a death insurance and will pay death benefits to the insurers family.
Some insurance policies also pay the funeral expenses. There’s another great benefit you get as an employer, it keeps you protected from paying big settlements or high lawyer fees if an employee claims that your failure or careless caused an injury or accident and you failed to provide them a safe working environment.
By Kailey Barney