It can be hard to imagine what that accident could be for your business. But accidents can occur in any industry, like a machine-related injury or someone falling in your office.
That’s why Workers’ Compensation is there to protect you and your employees.
Some small business owners view Workers’ Compensation insurance as a burden because it’s an additional cost to the company. It’s not until an accident occurs that an employer gets serious about Workers’ Compensation, but at that point, it’s too late.
Let’s review what Workers’ Compensation is and why your business needs to be protected.
What is Workers’ Comp? And, why is it essential for all businesses?
Workers’ Compensation is an insurance policy that provides an employee with wage replacement and medical costs if an accident occurs during working hours. Essentially, any business with employees needs a Worker’s Compensation insurance policy.
Workers’ Compensation policies protect your business’s most valuable assets: your employees.
What are the repercussions of not having Workers’ Compensation?
Your business can be in for a rude awakening if there’s no coverage. Most states have laws regulating Workers’ Compensation. A good practice would be to contact your state’s Department of Labor or an agent knowledgeable in the Workers’ Compensation Benefit to determine if this is a benefit your business needs.
If your business doesn’t have a policy, you may be liable for wage replacement and medical costs. Additionally, injured employees may file a lawsuit against your company.
The Wrong Approach
Having a Workers’ Compensation policy in place sounds like a no-brainer, especially if your business is in an industry where accidents are more frequent, such as transportation, construction or manufacturing. Unfortunately, for companies outside these industries, owners usually approach agents after a claim to see the available options.
This is the wrong approach to take. If you wait until after an accident, there might be a breakdown in your business model. Setting up programs and aligning your business with good Workers’ Compensation Carriers can only benefit your business’s future claims process and, more importantly, maintain employee retention.
Businesses typically view Workers’ Compensation as insurance. But Workers’ Compensation is really a benefit. Companies are providing coverage to their employees through wages, medical costs, permanent or partial disability, and death benefits arising from a valid compensable injury while on the job.
The Right Approach
Develop programs within your business organization to complement your Workers’ Compensation policy before an accident occurs, thus taking away unforeseen burdens on your business and employees.
So, what are some of the finer details? Start by contacting your insurance provider immediately.
Business owners review vendor and product options for every part of their business. That should be the case for Workers’ Compensation. Review multiple coverage options and determine what the carrier has in place to assist your business’s safety and training needs..
Developing a comprehensive Workers’ Compensation plan involves viewing your organization from the top down. Some questions that you’ll likely need to answer are:
- What are your hiring protocols?
- What is the implementation process?
- What is your safety process?
- Are there any dependent claims?
Those questions will help you and an insurance agent craft a program that works and doesn’t contain holes.
Meeting an experienced agent will also help you better understand your company’s experience mod (which determines premiums) and the controllable experience mod (a lower experience mod rating can result in discounted premium costs).
Above all, you’ll understand that while Workers’ Compensation is insurance, it shouldn’t be strictly viewed that way. Remember, Workers’ Compensation is a benefit.
Most businesses, will require a Workers’ Compensation insurance policy. You can’t anticipate when accidents occur, so it’s in your interest to ensure your business is protected.
Contact Bank Midwest Insurance today to talk to our insurance professionals.
Post updated. Originally published February 2017.