A small business manufacturing metal rods is growing well. Within the next 6 months, it is set to thrive with bigger contracts and more revenue. Then disaster strikes. An employee gets injured in the workplace and the company needs to pay the medical bills – or risk a lawsuit. This could badly affect cashflow in a way that will take years to recover. What can be done?

Workers compensation insurance is an important business protection asset. It is an asset because in the event of something happening to an employee, the business is financially protected. Workers compensation insurance for small business is especially critical. Since for the most part it targets small businesses, it can be very affordable being less than $30 each month per employee.

Workers Compensation for New Business

As a new business, it is essential to get workers compensation insurance from the time that you hire your very first staff member. This matters whether your business has to do any manufacturing, service provision or production that would result in an injury. Take cafés for example. Someone could get badly scalded by hot water when preparing a cup of coffee.

What does Workers Compensation Insurance cover?

This type of insurance can offer a business financial help in the event of the following: –

• Supplement wages for the employee – This is required when the employee may be unable to attend work while recovering from an injury that they get in the workplace. This ensures that the employee does not lose their wages.
• Medical expenses in the event of an injury – The injury would have to have even incurred in the workplace.
• Death benefits – These are given to the family members of an employee who lost their life due to a work-related accident.
• Legal fees should an employee sue following an injury – This would come into place when employee negligence is alleged to be the issue and the employer is sued.

Workers compensation for small business owners is a must for every state. However, coverage may differ from one state to another. It should be noted that employee’s compensation insurance serves two purposes. It offers protection to both the employer and the employee.

To determine workers compensation employer cost, an employer needs to define which industry they are in. This is because the premiums are based on business classes. Within these classes, people within different departments in the same business may have differing premiums. For example, those working on the shop floor may have a rate that differs from those in the back office. The calculation reviews what the loss costs for the businesses within a class have been five years prior. Added to this figure are certain economic factors within each state.

Making a claim requires any injured party to get immediate medical help from a professional. Medical reports are required for making a claim and then receiving compensation payments.

Employers have the chance to control their insurance costs by finding out if there are any credits that are available in their state. These could be available if the workplace is drug and alcohol free for example. Ensuring other safety measures are put in place can also offer excellent protection.