Workers’ compensation insurance is similar to car insurance in that without it when an accident happens it can spell disaster. Drivers who get into a fender bender without insurance run the risk of being taken to court and being forced to pay the other driver’s medical or property damage. Ultimately, this can lead to financial ruin. The same can happen to an employer who isn’t properly insured. With that in mind, here are 10 reasons worker’s compensation insurance is a good idea.

  1. It’s the law. While it varies from state to state, most businesses are required to have some sort of worker’s compensation. Larger businesses sometimes have policies that protect workers using company profits, but smaller ones may not have that option. Companies that refuse to get worker’s compensation insurance or set up an internal policy run the risk of getting hit with penalties that far exceed the cost of insurance.
  2. It’s hard to get an exception. Exceptions vary drastically depending on which state you’re in. For states that do offer exceptions, they can be difficult to come across. For example, in Florida a business with fewer than four employees is exempt, but in Massachusetts nearly every employer is required to have a policy.
  3. You are liable regardless of fault. In the past before worker’s compensation policies were mandated, before a worker could receive assistance they had to prove their employee was at fault. Today that is no longer true, an employer is liable even if an employee contributed to their injury.
  4. Employees are cared for and heal faster. Most employers are not Ebenezer Scrooge. The vast majority of them want to do right by their workers as best they can. Worker’s compensation insurance get employees the care they need, including upfront medical expenses, loss of wages, and rehabilitation.
  5. Employees receive benefits quickly. With worker’s compensation insurance, employees receive benefits quickly and when they need them. Insurance companies pay swiftly, removing the likelihood that an employee will come back later to sue for reimbursement.
  6. You’re covered in court. No one wants to deal with going to court, but if there is an employee who decides to sue after receiving compensation, the insurance company will cover it.
  7. Disputes are handled by a third party. If an employee is unsatisfied with the compensation they have received, you won’t be drug into the controversy. By having a mediator handle any disputes it’s more likely that everyone will walk away satisfied.
  8. You’re protected from the unexpected. No matter how well you think an internal policy may have you covered, there’s always an accident that can come along to test it. These types of situations can ruin a business, especially if it comes during hard times. With worker’s compensation insurance you know what your premiums cost and can plan ahead of time, even if they increase after an accident.
  9. A good reputation can mean savings. Good drivers very often see their rates decrease for good driving. It can work for businesses, too. Employers that operate a safe workplace often find that their premiums decrease, due to insurance companies acknowledging them being a lower risk.
  10. It’s simpler. While some people believe in an internal policy and others try and exploit exemption loopholes in state laws, both will require you to hire legal counsel. And that doesn’t guarantee success or that you will save money. In addition, whatever policy you put in place may have to change if your business grows or there are changes to legislation.
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