Workers’ Compensation Insurance: Why Every Business May Not Have Adequate Coverage

When you interview with a company or accept a job offer, you discuss wages and benefits, but you might not talk about (or even think about) workers’ compensation insurance. Whether you’re working in a warehouse for a big corporation or in an office of a small business, it’s important to be covered by workers’ comp. Does your employer offer adequate coverage?

Does Your Employer Have Workers’ Comp Coverage?

As an employee, you might automatically assume that if you are injured at work, you’re covered by insurance. Depending on your employee, you may or may not have proper coverage, and as an employee, it’s your right to know.

Who Doesn’t Have Workers’ Comp?

There’s no one type of business that may not have proper workers’ comp coverage. The majority of employers who don’t have the insurance live in states where they are eligible to “opt out” or don’t fall under the category of requiring it due to employee size.

Typically, these types of businesses have a small number of employees, and in many cases, the employer has no history of work-related accidents and is considered low-risk (such as an office setting).

Even though many of the employers who decide against providing workers’ comp insurance are trying to cut costs, they are ultimately putting themselves and their employees in significant financial distress.

Why Workers’ Comp Insurance Is Necessary

Despite the myth that workers’ comp is designed only to protect employees and cause a headache for employers, it’s a form of insurance coverage that protects everyone.

Consider this scenario:

An employee who works for a small company of five employees is injured while at work and misses about two weeks of work due to the injury. Due to the employee size and state laws, the employer never signed up for workers’ comp.

Since the injured employee is away from work, the company is down to 4 employees, and they are getting behind on work. The injured employee is planning on filing a personal injury claim with the hope of receiving compensation for medical expenses and missed income.

Not only will the employer end up spending money on legal fees, but will most likely have to pay the employee, which might mean that the business will lose more money and have to cut even more costs.

Every Employee Should Be Covered

As you can see from this basic, but the common scenario, when an employee “opts out” of purchasing workers’ comp insurance or has minimal coverage, all employees, the employer, and the injured employee suffer.

Whether you’re one employee of four or work with 20 other people, your employer should have you covered, even if workers’ comp insurance is optional.


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