By Carol Trehearn
Getting the right insurance coverage for your business can be tricky. Say your business has many employees on the books. They might be covered by health insurance, but is this enough? Will your business be covered if they were to suffer from a work-related injury?
A simple answer to both of those questions is often, ‘No’.
You will typically have to combine that health insurance with workers compensation insurance, a tricky thing to navigate as the requirements for this type of insurance differs between states. If you’re aware of the latter, you will know there are many similarities between the two. However, there are big differences between the two – the type of differences you need to understand.
What does health insurance provide?
In essence, health insurance helps cover your employees’ personal injuries and illnesses that happened outside of work. As an example, say one of your staff members is sick with pneumonia. Their health insurance will help cover the finances incurred with their recovery. This means the insurance will contribute to the cost of medicine, doctor’s appointments, and even an extended hospital stay if necessary.
What it doesn’t cover, however, is the lost wages of your employees. Health insurance only assists with the likes of treatment and rehabilitation. If they were to suffer an illness or injury at work, and your business was covered with workers compensation, it would be a different story, however.
What does workers compensation provide?
When a work-related illness or accident happens to one of your employees, you want to avoid paying out-of-pocket for the expenses these incur. Even a relatively minor workplace injury could set you back thousands of dollars, something which very few small businesses could handle without being forced to close permanently. Plus, with 2.5 people out of 100 expected to obtain some sort of injury at work a year within the state of Georgia alone, it means it’s likely going to be an issue that your business will have to contest with.
Fortunately, you don’t have to pay these costs if you have workers compensation insurance ready to go. Not only does it help with covering medical expenses, but workers compensation also covers loss of income that your employee may have suffered due to being off from work due to their ailment.
In addition, this insurance can provide the cost required for employee retraining if needed. Plus if an employee is permanently injured and cannot return to work, or they sadly pass away due to the accident, workers comp will provide benefits in these situations.
Do you need workers compensation?
In certain cases, it’s not mandatory to operate a business with workers compensation insurance. This biggest factor into determining what is required is your state, as many have different laws and regulations. As an example, workers comp insurance for Georgia businesses is only necessary for most once they have three employees on the books, however because Georgia has large gig-based economy, employers have to provide this cover to part-time staff as well, so that they’re protected too.
While it might be an additional expense and your budget could already be stretched, it still makes a lot of sense to acquire workers comp insurance – whether it is mandatory or not. The only place where it doesn’t apply is if you operate as a sole proprietor or partnership in an industry which isn’t deemed high-risk.
You never dream of an employee getting ill or injured while at work, but it’s not an uncommon occurrence. When it does happen, you want to ensure you’re financially protected and help the afflicted party.