Workers’ compensation insurance

Workers' compensation insurance is a safety net that helps your business and your employees recover from work injuries and illness. This includes everything from a minor injury to a broken bone from a fall.

While workers' comp laws differ by state, this policy is generally required as soon as a small business hires their first employee (or a certain number of employees), including part-time employees.

Workers' compensation benefits will take care of your injured workers by paying for their medical expenses, including medications, physical therapy, and doctor visits. And if the employee sues, it’ll cover those costs too.

If you don't purchase workers' compensation, you can find yourself paying out-of-pocket for costly medical bills and legal fees, which can financially devastate your small business. In addition, most states impose pricey penalty fees for noncompliance.

A workers’ compensation policy will cover any reasonable claim, regardless of who caused the accident or injury.

Workers’ comp covers any on-the-job injuries, both in your office or anywhere else – including at employees’ homes. This policy ensures that you and injured employees get full medical care and return to work better than ever.

More specifically, workers' comp insurance provides coverage for:

Most state laws require business owners to purchase workers’ comp as soon as they hire their first employee. Other states require coverage when a business has a certain number of employees. Some states allow businesses to self-insure or have other exemptions. Others give approval for small businesses to pay for workers' compensation claims out-of-pocket.

In Florida, for example, you’ll be required to carry this policy when you hire four or more employees. In California, you'll need workers' comp even if your business has only one employee. Texas and South Dakota are the only states that don't require this coverage.

Make sure you know both the workers’ compensation laws in your state and your employees’ states. You can find this information on your state's department of labor or division of workers' compensation websites.

If you don’t comply with state workers’ comp requirements, you could face fines or even jail time.

Given the high cost of health care, sole proprietors, contractors, and subcontractors should consider carrying workers' comp coverage.

The work you do every day like typing, pointing and clicking, and even staring at your monitors can cause health issues. Conditions like carpal tunnel syndrome, tendinitis, or chronic headaches can develop over months or years in a workplace environment. In addition, you're always at risk for unpredictable injuries from falls or slips.

Your health insurance might not cover injuries that are related to work, which would leave you responsible for hospital bills and related medical expenses. On top of that, you would miss out on lost wage replacement benefits that can help keep your business running while you recover.

Workers' comp provides this key coverage. Learn more about workers' compensation insurance for independent contractors and the self-employed.

A workers' compensation policy protects your small business financially from workplace injuries and illnesses, but it doesn't cover all vulnerabilities associated with running a business.

To fully safeguard your small business, you should consider business insurance policies to protect against these common risks:

TechInsurance is a trusted insurance expert for all small business owners, including contractors and limited liability companies (LLCs), with extensive knowledge of the IT sector. Our licensed insurance agents are available to answer your questions and help you find the coverage that's right for your business needs.

With TechInsurance, you can easily download a certificate of liability insurance for your small business, often on the same day you buy workers' compensation coverage or other types of insurance products.

This comes in handy for companies and consultants that need proof of insurance to sign a contract or a lease and don’t have time to call an insurance company for documentation. Clients and landlords may ask for a certificate of workers' compensation insurance or other types of business insurance to show you’re insured.

Workers’ compensation insurance helps employers avoid work injury lawsuits, since workers don’t have to take you to court to recover their medical costs and wages.

To prevent double-dipping and ensure a win-win for you and your employees, injured employees must agree not to sue your business when they accept workers’ comp benefits.

If your policy doesn’t pay out as much as injured employees want or think is fair, they can refuse their workers’ comp benefits and sue your business for personal injury instead. Luckily, workers’ comp policies usually include employer’s liability insurance to cover the cost of these lawsuits.

Businesses in North Dakota, Ohio, Washington, and Wyoming must purchase workers’ comp through a state fund. These policies don’t include employer’s liability insurance, which leaves you vulnerable to employee lawsuits. To fill this gap in coverage, you can buy employer’s liability insurance from a private insurance carrier.

Workers’ comp is a no-fault system, meaning you don’t have to worry about who’s to blame when it comes to a work-related injury. Once a workers' compensation claim is approved, your worker will have their medical bills and disability benefits covered. And in exchange, they give up their right to sue you.

Learn more on how workers' compensation insurance works.

A safe workplace means less risk of employee injuries. Businesses that emphasize workplace safety are also less likely to make a claim on their policies. This helps keep the cost of workers’ compensation insurance coverage low.

There are simple steps you can take to reduce hazards and create a safe workplace:

• Encourage your employees to stretch and take frequent breaks
• Provide an ergonomic setup with good lighting to prevent repetitive stress injuries along with eye strain, headaches, and other common complaints
• Avoid clutter by removing loose rugs and taping down wire

Even a minor mishap can lead to major medical expenses. That’s why it’s so important to take these precautions.

Learn more strategies on how to reduce liability claims against your business.

The majority of workers' compensation policies cover fatalities and death benefits.

Workers' comp can help cover funeral costs and burial expenses, as well as financial assistance for the employee's family and dependents.

Both policies deal with injuries, but cover different things.

General liability insurance covers injuries sustained by customers and third parties on your company property. Workers' compensation covers expenses for injuries sustained by employees of your company.

You may need both policies depending on your company's risks. Learn more about how general liability insurance compares to workers' comp.

There are several ways to save money on your workers' compensation insurance costs.

First, you can ensure that you are properly classifying employees based on their type of work. Low-risk workers, such as office and desk-based employees, will likely save you money on workers' comp costs compared to employees with more risky job requirements.

You can also consider a pay-as-you-go payment structure, which could save on both upfront and monthly costs. Pay-as-you-go workers' comp rates change on a monthly basis based on accurate and up-to-date payroll data. This can prevent you from paying higher rates than necessary.

Lastly, you can save money by pursuing safety programs and a good Experience Modification Rating to keep premiums low. This rating reflects your general company risks, previous claims injuries, and the likelihood of future potential hazards.

Keep your workers' comp rates as low as possible by avoiding claims, maintaining a safe work environment, and ensuring your employees have the tools and training necessary to safely do their jobs.

If you want to learn more about this policy, you can find additional answers in our frequently asked questions about workers' compensation insurance.

If there are any additional questions you have about coverage, you can also contact a TechInsurance agent.