Businesses in America face many risks in the course of their operations. Aside from cyber incidents, fraud, and natural disasters, the risk to workers is of great importance. That's why you should consider buying workers compensation insurance.
Employees from various industries face many types of workplace hazards. These include exposure to harmful chemicals, fire, and repetitive use injuries. There's also electrical hazards, falling objects, and accidental falls. Moreover, there are cases of workplace violence and stress.
As a result, these hazards leave companies facing legal and financial risks. Worse still, they could cause health issues or the death of an employee. Thus, you have to take steps to prevent these outcomes.
One of those steps is buying workers compensation insurance. Keep reading to learn more.
Importance of Buying Workers Compensation Insurance
Every new business should have insurance policies within the first five months. This insurance should cover general liabilities and workers compensation. They can also look at other insurance options such as commercial auto insurance.
Of these insurance choices, it is important to consider buying workers compensation insurance. Here are five reasons why.
1. To Comply with the Law
The Federal Employees' Compensation Act (FECA) expects companies to insure their workers. The goal of the law was to ensure employees get compensation in case of injury. The law also simplifies the process so companies and employees don't get into a legal tussle.
This means the employee will get a monetary award for their suffering. At the same time, the company won't hurt their cash flow.
2. Protect the Business from Claims
Having workers compensation insurance is a great risk management strategy. As mentioned above, an injured employee may file charges against the business. This could be for negligence or actions that caused the injury to the employee.
Yet, with this insurance policy, businesses that take reasonable safety measures get protection. An employee won't put them out of business with a lawsuit.
3. To Pay for Medical Care
Aside from health insurance, workers compensation insurance also covers medical costs. This cover doesn't seek to establish who is to blame. Instead, it pays for the costs of treatment and rehabilitation.
Moreover, it provides benefits to the remaining family if an employee dies. This is vital if the employee had dependents.
4. To Compensate Injured Employees
Injured employees get lost income reimbursements. If an employee won't be able to do another job, they'll appreciate having this money. Plus, you won't be dipping into the business' cash flow to pay them.
Paying from the business' account is a recipe for collapse. Thus, it's important to get the insurance company to pay off any claims. You may also have to pay to retrain injured employees.
5. For Covering Client Contracts
Some states have a different view on insurance for subcontractors. As such, you must have an insurance policy that covers these individuals. You'll find some clients are unwilling to work with you unless you show you have the policy.
Learn More About Risk Management, Business, and Personal Insurance
As you can see, buying workers compensation insurance is very important. It protects your business against legal risks and expenses on injured workers. It also gives you a backup plan in case something bad happens.
Contact us to learn more about risk management and business and personal insurance.