Let’s say you started a new business and you’re working hard to meet your goals. You spent months developing a business strategy and are finally ready to start your new venture. Shortly after that, you discover that you should consider acquiring workers’ compensation insurance to protect you and your workers from on-the-job injuries. At this point, you’re probably wondering, do you really need workers’ compensation insurance for your business?
The short answer to that question is a resounding YES. All start-up businesses need workers’ compensation insurance, even if their work activities are relatively safe. However, you may still have questions about the workers’ compensation system; here are some of the answers you’re looking for.
Read on to discover six crucial workers’ compensation facts that every startup should know.
#1 What’s the definition of workers’ compensation?
Workers’ compensation is a type of insurance that provides benefits to workers following a work-related injury. These benefits include wage replacement, coverage for all medical expenses incurred due to the injury or illness, rehabilitation expenses, job retraining if necessary, and even death benefits for the worker’s surviving dependents.
In many cases, employers will be required to purchase this type of insurance. However, it is not simply a liability they must meet; the workers’ compensation system will also safeguard their interests if an employee is injured.
#2 Workers’ comp is a no-fault system
You may be asking yourself; how does workers’ compensation benefit my start-up company? The answer is simple, workers’ compensation is a no-fault system, and it can spare large and small businesses alike a lot of headaches.
A no-fault system means that employees will be eligible for compensation regardless of who was at fault for the accident. In other words, if they caused their own accidental injury, they will still qualify for benefits.
In return, employers will not have to worry about dealing with multiple civil lawsuits after each injury. In fact, if a worker chooses to apply for workers’ compensation benefits, they will have waived the possibility of suing their employer for damages.
#3 Who needs workers’ comp insurance?
In short, every business, large or small, needs workers’ compensation insurance. If you have any number of employees (including yourself, of course), they all need to be covered by your workers’ compensation policy. Otherwise, you’ll expose yourself to claims that could be much more costly down the road.
On the other hand, it’s worth noting that there are certain exceptions. For example, independent contractors or freelance workers you work with do not have to be included in your workers’ compensation coverage. Only your employees will qualify for benefits in the event of a work-related injury or illness.
#4 How much does it cost?
The cost of workers’ compensation insurance depends on a system that classifies employees according to their functions. This is known as the workers’ compensation rate for their specific occupation. For example, this can be around 0.26 cents for computer programmers and up to $5.00 for nurses.
Once you know the workers’ compensation rate, you simply divide the employee’s annual salary by 100 and multiply it by the workers’ compensation rate. That will equal the estimated cost of your workers’ compensation insurance.
#5 What injuries and illnesses are covered by workers comp?
Workers’ compensation covers all injuries or illnesses that occur within the course of the worker’s employment. The injury does not necessarily have to occur on the premises of your start-up company to qualify for compensation. For example, if the employee was driving a vehicle while performing a work activity at the time of the accident, they will be eligible for benefits.
Some of the injuries covered by workers’ compensation include slips and falls, falls from heights, electrocutions, cuts and lacerations, and much more.
One particular case involves repetitive trauma injuries, such as carpal tunnel syndrome. These types of damages are covered by workers’ compensation, even though they may not be easily detected. (They are ubiquitous in workplaces where there is a lot of typing).
On the other hand, if an employee contracts an illness on the job (including COVID, in many cases), he or she will also qualify for benefits.
#6 Are there any injuries that AREN’T covered by workers comp?
As a matter of fact, there are. Although it may be apparent, not all injuries that occur on the job will be covered by workers’ compensation insurance.
Generally, workers’ compensation does not cover self-inflicted injuries, injuries caused by fighting or horseplay, injuries caused while under the influence of alcohol and other substances, or injuries sustained while violating company policies.
In these cases, no matter how many workers’ compensation attorneys knock on your or your insurer’s door, these employees won’t qualify for benefits.
Talk to a Los Angeles Workers’ compensation attorney to learn more
Now you know the basics of workers’ compensation! The next step may be to find a reliable insurer and purchase a policy that suits your needs. However, if you want to learn more about workers’ compensation, consider consulting with a Los Angeles workers’ compensation attorney, such as CB Law Group.
This team of legal professionals will be ready to advise you on everything you need. They work 24/7, so you can call them anytime – it’s free! You have nothing to lose.