Workers compensation insurance is one of the mandatory forms of business insurance for every businessman who intends to hire employees. This kind of coverage is a must-have in all the American states except for Texas. Today, we are going to take a good look at the most confusing aspects of workers compensation insurance.
What is covered?
In general, workers compensation business insurance is meant to cover various employee injuries that happen on the job. It protects people from all the health problems which occur in the scope and course of doing work for their employers. This includes traveling for the company. However, problems occurring while commuting to and from work are typically not covered. Workers compensation insurance can include protection from injuries due to terrorism, disasters and workplace violence. Such a policy also sometimes covers certain occupational illnesses. All the money after the employment accident are paid out directly to the injured employee regardless of whose fault it actually was.
Must you purchase workers compensation insurance?
New business owners frequently ask this question among the most important ones. Actually, each state has different requirements and you will need to check with your own state insurance department in order to determine what your state regulations are. But generally, if you have employees, you are obliged to purchase a comprehensive workers compensation policy. Although, there are several exceptions:
1) Partnership or sole proprietorship
Most states allow small businesses where there are very few employees and they are actual owners of the company to opt out of this kind of coverage.
2) Employee threshold
In some states, businesses can opt out of this coverage, if they have under a specified number of employees.
3) Independent contractors
Typically, businesses that work with independent contractors do not need special workers compensation insurance.
