When an employee is injured on the job, the employer is responsible for their medical bills and other costs related to their injuries. Although small businesses and start-ups rarely encounter employee injuries, workers' compensation insurance protects your business from becoming financially crippled by any potential lawsuits that could arise.
When there is an on-the-job injury, the employee files a claim for workers' compensation. Typically, all expenses for the injury are covered by your workers' comp insurance. There are, however, times when the matter can escalate to a lawsuit. It is those times when you would want to consult a workers' comp lawyer for advice and counsel.
Workers' comp will cover your business should an employee bring a suit against that business with claims of negligence. All lawsuit costs and damages are covered through the workers' comp insurance. Ultimately, even if it was not a legal requirement, workers' comp insurance is an excellent investment for companies of all sizes.
Starting a small business sounds so easy at the beginning. Once you begin to realize the amount of money required to run a business, including monthly expenses, legal requirements and the many options related to each, you may begin to look for ways to save money or cut corners. When it comes to workers' compensation insurance for startups, this could be a bad idea.
As a legal business, you are required by both federal statute and state regulation to be covered against workers' comp claims. Should you not carry enough coverage, you could be vulnerable to heavy fines. If you are under-insured and there is an employee injured on the job, you could be held negligent and subject to a substantial settlement amount.
There is an obligation as an employer to protect employees. States carefully regulate businesses to make sure that this protection, in the form of workers' compensation insurance, is in place. The states are guided by federal regulations.
The 4 key questions that you will want to ask when choosing your workers' compensation insurance are:
Workers' compensation insurance costs are covered by the business. This insurance is mandatory in most states even if you only employ a few people. Considering the benefits of workers' compensation insurance, and the protection it provides both the employees and the business itself, the costs associated with purchasing and maintaining a workers' compensation insurance policy are minimal compared to the costs you might have to pay out in a lawsuit if you are not covered.
Workers' comp insurance is available through private coverage or state-run insurance programs:
A third option that is primarily exercised by large corporations with resources is the self-insured employer. These companies cover all of the expenses related to employee injuries and lost wages on their own. If your business is looking to self-insure, you will want to consult with a workers' compensation lawyer to make sure that it is handled with everyone’s best interests in mind.
Each state has different laws related to workers' compensation requirements. In many cases, they will only require you to have workers' compensation insurance if you have more than five employees. However, some states require insurance to be in place no matter what size your business is.
Failure to comply with the workers' comp state laws can leave you subject to heavy fines. When you are looking at the policies available to you, always make sure that they will keep you in compliance with the state your business is registered in.
Some states will allow exemptions from workers' comp insurance for small businesses or for certain trades. Each state has different regulations. Casual workers, domestic help, and having a few employees can give you an exemption. This is not true for all states. Some states, like Colorado, require workers' compensation insurance for every business of every size.
If you are considering claiming an exemption, not insuring your business, cutting corners and paying for lower-end workers' compensation policies or having trouble choosing between a state fund and private insurance, you should sit down with a workers' compensation attorney so that you can better understand the gravity of any decision you make. A workers' comp lawyer understands both sides of workers' comp claims as well as the statutes that regulate them.
If you do have an employee who is injured on the job, you will want to consult with a workers' comp lawyer to make sure that your business is covered to the extent that it needs to be. If your employee refuses the settlement offered by your workers' compensation insurance, they may file a claim. If a claim is filed, you will need legal representation throughout the court process.
A workers' compensation attorney can either represent the claimant or the defense. When a workers' comp lawyer is representing the defense, they are responsible for investigating the incident, making sure that the medical expenses are legitimate, and helping the insurance company in the settlement negotiations.
Too many times, an employee will attempt to commit fraud and get money from a workplace injury by faking a more severe injury than they actually have. Workers' compensation attorneys are trained to catch these individuals so that neither your business nor your insurance will be liable for paying for injuries that are not real.
A workers' compensation attorney will also represent the claimant should they file a claim against the business. In this case, the attorney will work to get the maximum amount of money for their client for medical bills, lost wages and if necessary, long-term disability.
They will coordinate with the medical providers to make sure that the medical bills are being paid. Should the case go to court, they will represent the claimant at all depositions and during a trial. The attorney will be in constant contact with the insurance company to ensure that all expenses related to their client's injuries are paid.
Workers' comp claims rarely occur for small businesses, and there is usually little need for a workers' comp lawyer. In evaluating your workers' comp insurance options, you may want some input from a workers' comp lawyer who can explain every aspect of the workers' comp system. A workers' comp lawyer can put into perspective the pros and cons of the various types of workers' comp insurance, claims, and the fines that could be levied against you if your coverage is not complete.
They can help you determine if the policy you are considering provides enough protection for your business or if your business qualifies for an exemption in your state. For more information about workers' comp insurance, employer obligations or if you need to consult a lawyer, take a moment and contact us today for guidance.