Lots of franchise businesses start out small. But as you hire more employees, open new locations or change business categories, it’s important your workers’ compensation coverage keeps pace with your growth.
Understanding workers’ compensation for your business is important and helps ensure you manage risk and stay compliant. Here’s what to know:
What Workers’ Compensation Covers
Workers’ compensation insurance provides benefits coverage to your employees in the event of a work-related injury or illness. Common incidents covered under workers’ compensation include:
- Slip-and-fall accidents resulting in injuries
- Back injuries due to lifting or overexertion
- Repetitive stress injuries (such as carpal tunnel)
- Injuries that occur during travel for work (not including commuting)
In some cases, serious accidents and injuries can occur on the job. Even with the best training and safety precautions, workers may have a work-related injury or illness that results in:
- Accidental death
- Permanent disability
With workers’ compensation, these injured workers can receive funds for their medical expenses and partial lost wages, in return for agreeing not to file a claim against the employer. Death benefits may also apply for cases where a work injury or illness leads to the death of an employee. In cases where an injured employee does file a claim, workers’ compensation can also cover the costs to defend your business from the lawsuit.
Which Employees Need Coverage
Workers’ compensation insurance is required by state law for most businesses with employees. Coverage for sole proprietors and partnerships is usually not required. Here are some key facts about coverage needs:
- Workers’ compensation insurance is required by law in almost every state.
- Salaried, hourly, exempt, non-exempt, part-time and full-time workers all need to be covered by workers’ compensation.
- Even some commission-only workers, contractors and subcontractors and paid family members of a business may need coverage, too.
Workers’ compensation insurance is regulated at the state level, meaning each state has its own requirements for benefits, coverage areas, coverage type and more. It’s important you have adequate insurance for all employees wherever your firm operates and to the extent each state’s guidelines require.
When to Reassess Your Coverage
Over time, your workers’ compensation insurance needs will change, so it’s important to know when to reassess your coverage.
Update your coverage when:
- You hire or expand—Review your coverage when you hire new employees.
- You expand into a new state—Understand that requirements vary, so check local rules when you expand across state lines.
- Your business category changes—Note that any changes to your business category may impact coverage requirements for your state.
- Your state requirements change—Check your policy annually to make sure you are compliant with any new state requirements.
Why Workers’ Compensation Coverage Matters
Workers’ compensation insurance protects your business and your employees. Coverage helps ensure that your employees and their families have a remedy for workplace injuries and that your business is not unduly burdened with costly legal claims from an accident.
Workers’ compensation coverage also protects you and your business from regulatory actions, which may include costly fines or even criminal charges for noncompliance in some states.
Take time to understand workers’ compensation coverage and follow all requirements to maintain compliance.
With a Workers’ Compensation policy from Lockton Affinity, you can get the coverage you need to meet state requirements and minimize the risks your business faces. Plus, it’s fast and easy to find the right coverage for your business today.