Here’s What You Should Know about Workers’ Compensation

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Workers Compensation insurance is complex and confusing, especially for those who’ve just started their own businesses or are hiring employees for the first time.

Use these questions to determine if you need workers’ compensation insurance and to figure out how to obtain the best quotes:

Do you have employees?

If so, most states require you to obtain workers’ compensation insurance. workers’ compensation pays if a worker is injured on the job. Failure to comply may result in costly fines or lawsuits. Although requirements vary from state to state, once you hire your first employee, a business is required to obtain the insurance.

Do you conduct business across state lines?

While most states require Workers’ Compensation insurance for even one employee, other states allow up to five employees before requiring a small-business owner to obtain coverage. If you do business across state lines, you must comply with each state’s legal mandate.

Here are a few other facts to keep in mind:

  • Independent contractors are exempt – usually.
  • Married couples and family members might qualify. Unless a company is held in both names, hiring a family member often counts toward the number of employees.
  • The type of industry might matter. Some states have different rules for different types of industries, such as contractors and construction workers.
  • Keep an eye on subcontractors. Your business is ultimately responsible for any accidents or injuries that may take place on your property. Always verify that subcontractors are current on their own insurance coverage to avoid unwanted risk.
  • One of the best ways to keep Workers’ Compensation rates low is to stay safe and implement a written safety policy. By keeping claims low, it is possible to reduce premiums.

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