As a responsible business owner, you do everything you can to prevent accidents from occurring while your employees are on the job. Unfortunately, even with the best safety measures in place, accidents still occur. When an accident results in the injury, illness or death of an employee, your company can be held legally responsible. To protect your company from loss in these situations, maintaining adequate workers compensation insurance coverage is essential.
Workers compensation insurance policies are designed to protect employers when employees are injured on the job or develop job-related illnesses. When an employee is injured or gets sick because of his or her job, the employee can file a claim with the insurance carrier. If the carrier reviews the claim and finds it to be valid, the employee will begin receiving weekly payments equal to a portion of his or her usual pay. Injured or ill workers also receive medical care through these policies.
If an employee is permanently disabled because of a work-related injury or illness, workers compensation policies often provide ongoing benefits. Likewise, death benefits are typically available to the employee’s family in the event of a fatal injury or a terminal illness. In addition, workers compensation policies provide you with legal representation when necessary, and they protect you from most lawsuits related to employee injuries and illnesses.
The National Federation of Independent Business reports that nearly all states require the majority of employers operating in the state to purchase a minimum amount of workers compensation insurance. The only exception to this rule is Texas, which doesn’t require workers compensation insurance for most employers.
Some states exempt certain employers from workers compensation insurance requirements based on the nature of their work or the number of employees. For example, in the state of Virginia, employers with fewer than three employees are not required to buy workers compensation insurance. On the other hand, the states of Michigan and Washington don’t allow exemptions for any employers, regardless of the number of employees. Check with your state’s workers compensation department for specific details.
Failing to purchase workers compensation insurance puts your business at risk in several different ways. Some of the risks associated with lack of insurance include:
No protection from lawsuits: Workers compensation usually protects you from lawsuits filed by employees who have been injured or become ill as a result of work. However, without workers compensation insurance, you are vulnerable to these lawsuits. Not only will you need to pay for your own legal representation, but you must also pay any settlements your employee is awarded in court.
Financial responsibility for employees’ injuries or illnesses: If an employee is injured or develops a work-related illness, you are typically responsible for providing medical care and replacing lost wages. If the employee is permanently disabled or dies as a result of his or her condition, your expenses will increase dramatically.
Penalties from the state: State laws vary. However, most states impose penalties on employers who are required to carry workers compensation insurance but fail to do so. The most common penalty is a substantial fine.
If you are a business that employs one or more people, getting workers compensation insurance is highly recommended. In most cases, it is even required by law. However, even if you are exempt from workers compensation insurance requirements, having a policy still provides valuable protections. In addition, having a solid policy in place reassures your employees and promotes a safe, healthy work environment. To learn more about purchasing workers compensation insurance, please contact Marine Agency Corp today.
422 US Hwy 22 W, Unit 7
Whitehouse Station NJ 08889
Toll-Free: 84-INSURE-NJ (844-678-7365)
9 AM - 5 PM , Monday - Thursday;
9 AM - 4 PM, Friday
PO Box 125
Whitehouse Station NJ 08889
Toll-Free: 800-35-MARINE (800-356-2746)