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Please note that the following is for general informational purposes only and is not intended as legal advice. Every business situation is unique, and laws vary by location. We strongly encourage all business owners to consult with their own attorney to ensure they are fully informed about the legal aspects of worker’s compensation relevant to their specific circumstances.
You’ll need a great deal of employment law knowledge when the time comes to expand your business from sole trading to working with employees. You have a team of people who rely on you to protect their rights. At the same time, you’re also trying to protect your own business.
However, there’s more to learn than payroll costs and taxes alone. You also need to familiarize yourself with workers’ compensation insurance. Here are some of the most important things you need to know about this insurance type:
Employees Can’t Sue You
Employees can hire workers’ compensation lawyers from law firms like Montagna Law to help them navigate workers’ compensation claims. This can be important if an insurance company has declined a claim or refuses to pay full entitlements. Lawyers can negotiate with insurance companies on their behalf.
However, workers’ compensation insurance means employees can’t sue employers if they have a work-related injury or illness. The trade-off is receiving medical benefits and wage replacement if they’re unable to work due to their injury or illness.
Employees Receive Compensation
As an employer, you have to make workers’ compensation insurance payments to ensure adequate insurance coverage for your employees. If they are injured or experience a work-related illness, they can be compensated for medical care and lost wages. If someone dies at work, their families may receive death benefits. However, employees would likely not receive compensation if their injuries were self-inflicted or they were participating in a voluntary activity off the clock.
Not All Employers Need Workers’ Comp Insurance
While workers’ compensation insurance is required for most businesses, it may not be for all. Refer to your state laws to know with certainty. Workers’ compensation isn’t always required for seasonal workers, farmers, or volunteers. However, don’t just assume your business falls into one of those categories. Consult a lawyer or refer to your local employment laws for information.
There Are Strict Reporting Requirements
Being a business owner can be stressful when you have a full to-do list. However, a workers’ compensation claim should be your main focus when your employee is injured or becomes ill. You are required to report injuries and illnesses to your insurance carrier and the most relevant state agency. If you don’t meet their deadlines, you may face penalties.
Encourage your injured or unwell employees to report their incidents immediately. Doing so can help you get the filing process underway quickly. You may then avoid serious repercussions.
Costs Can Vary Across Businesses
Business owners chat with other owners to compare operations and get advice. Workers’ compensation costs can sometimes be a topic of conversation. This is when you may notice that your costs are unique to your business. Many factors can influence your premiums, including your payroll, industry, and work safety measures.
If you have safety programs and maintain a safe working environment, your insurance premiums may be lower. This is because more safety measures can sometimes mean a lower accident risk. Insurance companies can often view this favorably.
It’s only natural not to know much about workers’ compensation before you hire employees. However, if the time has come to officially launch your business, now’s the right time to educate yourself on workers’ compensation insurance and all it entails.
