If you own or are considering starting a small business, you will be faced with Workers Compensation Insurance. What is Workers’ Comp Insurance, what does it do and what are your responsibilities and options when dealing with it? Here is a quick read on Workers Compensation Insurance.
A Quick History of Workers Compensation
Prior to the implementation of Workers Compensation Insurance, American workers who were hurt on the job had to fend for themselves. They had to prove negligence on the part of their employers and fight for compensation through the court system. This was expensive for average workers and relatively few were justly compensated. Even in situations where death resulted, claims rarely exceeded a year’s compensation. Wisconsin was the first to enact Workers Compensation laws and other states quickly followed. It wasn’t until 1948 that the last remaining holdout, Mississippi, enacted Workers Comp regulations.
Workers Compensation is designed to provide compensation and cover the costs of medical treatment for employees who are injured while performing work-related tasks.
Workers Compensation is a state regulated system, with each state differing slightly in their regulations. Basically, companies pay for insurance to cover their employees based on the risks of injuries in their specific employment categories. The idea is that higher risk employers would pay higher premiums, while low risk employers pay less in Workers Compensation Insurance premiums. In this system, both employees and employers are covered. Employers are protected from being sued “out of business’ by covered employees and employees can receive compensation and medical payments without having to sue employers.
Who Is Required to Carry Workers Compensation Insurance
With the exception of Texas, businesses in every state that has one or more employees need to have Workers Compensation Insurance. Where this coverage is acquired is a choice. Like other forms of insurance, coverage and rates can differ. This is why comparing Workers Compensation rates is important.
If you are a small business unsure of your requirements or options when it comes to Workers Comp Insurance, we invite you to contact one of our business insurance professionals. We will discuss your business and how you may qualify for the best rates. Connect with us soon to discuss your options.