As a business owner, your employees are among the assets you should treasure and hold dear. Their productivity can either make or break your business if not stall it.
Their efficiency and performance are directly reflected in the growth and profitability of your organization. Now, taking good care of your employees means various things.
Apart from providing them with a competitive salary package, various benefits, on-the-job training, and career development opportunities, they need a safe, healthy, and comfortable environment.
Along with support from their superiors, these are just some of the factors that promote motivation and productivity when combined. On the same note, workers’ compensation insurance should be among your priorities as your business grows.
By protecting one of the most important assets – manpower – it helps your business in more ways than most entrepreneurs care to know.
The following piece highlights some things you need to know about Workers’ Comp Insurance and why businesses should provide it.
1. Workers’ Compensation Insurance Protects Your Workers
Well, truth be told, job-related injuries may happen to workers when least expected. In that regard, if a team member of your employees gets injured in an accident at work, you would at least want to be able to care for them.
Honestly, most employees cannot afford to pay the medical expenses and recoup lost wages directly out-of-pocket. That’s where workers’ compensation cover policy comes in handy, and it is a legal requirement in many states, Arizona included. As vividly explained by this law firm, a worker who is injured on the job is likely to face costly treatment costs and medical bills after the workplace accident. This is not to mention lost wages, pain, and suffering as they recover. Therefore, the best way you can ensure their welfare is covered is by having workers’ compensation insurance in place just in case the unexpected happens.
However, the payable benefits only cover work-related injuries and not self-inflicted injuries or those caused by intoxication and substance abuse.
2. It Is a Legal Obligation
Usually, business owners are productive members of society and contribute a lot to the economy. They create jobs and improve the workforce. But quite often, most of them do not envision themselves being prosecuted, fined, or even imprisoned for the work they hoped to successfully accomplish.
However, this can be a possible outcome for any business that does not comply with the workers’ compensation insurance requirements. This is perhaps why each and every state has an agency for managing workers' compensation programs. In fact, nearly all states require workers to be covered.
Besides, the U.S Department of Labor maintains contact details for every state’s workers’ compensation agency, making it easy to make follow-ups where necessary.
3. Workers’ Compensation Insurance Protects You
Having a well-established workers’ compensation cover program for your employees goes a long way in not only protecting them but also yourself and the business. Otherwise, if a work-related injury or death occurs, then the employee or their family could sue the business in a civil court, thus costing the business hefty penalties and fines. Such situations could be financially devastating, enough to put you out of business within a short time. So, even if running a business is fast-paced and stressful, as a business owner you need to reduce the risk of complicated legal problems with your employees as much as possible, and one of the ways to do that is to invest in a solid workers’ compensation policy program.
This way, you and your business are legally safe and secure.
4. Financial Benefits
A business that complies with the workers’ compensation insurance policy requirements avoids paying fines and reimbursement in case a work-related injury or accident occurs. Workers’ comp policies also protect employers from direct lawsuits by injured employees. This financially benefits the employer by eliminating the risk of huge fee payments, fines, and related costs during settlement.
Additionally, it helps keep your staff motivated while on the job, knowing that their rights are protected.
This helps ensure that the business operations are running smoothly while protecting your organization’s reputation.
At the end of the day, the benefits will trickle down to increased growth and higher profitability.
5. Employees May Sue Negligent Third Parties
This is another important thing to know about workers’ compliance insurance. It means, if a third party’s negligence contributed to the injury or accident, the employee or their family can still sue the third party. Any proceeds from the suit are supposed to be applied first to reimburse the business owner for benefits paid to the injured employee.
This means that the negligent party can’t get away with it, so the employers are not left to bear the compensation burden alone.
This contributes to making the whole compensation and settlement process fair to all the parties involved.
6. Prevents Against Lawsuits
Needless to reiterate, lawsuits can be quite detrimental to a business, especially in its early stages. In most cases where employees are provided with workers’ comp coverage, they give up their right to sue the employer for injuries or accidents specified in the policy under the applicable laws and regulations. For example, the Pennsylvania Workers’ Compensation Act does not allow employees to come up with lawsuits against employers for work-related accidents and injuries as long as the employer has provided the necessary workers’ compensation benefits.
Of course, every business owner knows the negative effects of any form of litigation on the business.
A lawsuit can tarnish the reputation of the business and this is far known to lower the business’s value and sales. For that matter, a workers’ compensation program is a significant safety net to prevent employees’ work-related lawsuits.
7. Benefits Include Wage Loss, Medical, and Death Benefits
The workers’ compensation insurance benefits are defined and regulated by a state agency. Compensated damages may include:
- Medical bills
- Lost wages due to the injuries
- Pain and suffering
- Wrongful death
- Out-of-pocket expenses related to the accident/injury
In most cases, wage-loss benefits typically cover about one-third to two-thirds of a particular employee’s average weekly wage payment.
Also, the fault is rarely the main issue. This is because, neither the employee’s negligence in causing the injuries nor the business’s complete lack of fault act as factors when deciding whether the worker gets the benefits or not.
For many businesses, Workers’ Comp is crucial for quite a few reasons. It helps protect your workers, brand reputation, business growth, and financials.
With the above benefits in mind, nothing should be stopping you from getting the appropriate policy for your business.
