How Worker’s Compensation Insurance Can Protect Your Small Business

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Small business can be generally defined as business with less than 500 employees. According to annual report of US Small Business Administration for year 2018, 99% of all US based business could be classified as small businesses. Making them the heart of the US economy.

In order to protect one’s business it is important that the company obtains the correct worker’s compensation insurance which fulfills all the rules and regulations of that particular state.

According to Illinois’ worker’s compensation insurance law, it is necessary for the company to obtain insurance if they have a single employee, even if it’s a non-paid, part time employee.

It protects the interests of both employees and employers

A major misunderstanding about the worker’s compensation insurance is that it is only designed to protect the interest of the employees. This is only the partial truth. In reality, it safeguards the interests of both the employee and employer.

This insurance assures the employer that in the event that a claim is made by an employee for work place related injuries or illnesses, they will be covered for all the costs, including worker’s compensation attorneys.

Financial protection

  • Safeguards companies from legal fines and penalties

The law related to worker’s compensation insurance is very strict. A company can face heavy fines and legal penalizations if the law is not properly adhered to. Also, legal action can be taken against them if the insurance is not provided even after consecutive warnings.

This can affect small businesses very heavily as these businesses cannot afford such a large drain in their budget.

This insurance saves these small businesses from unwanted and unnecessary reprimands, protecting the company’s reputation.

  • Cost-Benefit analysis

In most of the cases, owner’s health insurance policy have many loop holes and it may not cover work place accidents entirely. This can result in the owner’s having to pay for all the medical bills and in some cases, lost wages entirely out of their own pocket.

This is not financially feasible for small businesses; hence this insurance saves the employers from this headache.

  • Covers damage to the property

In instances where the employee is injured and damage to company’s property occurs too. Not only does this insurance covers all the medical expenses of the employee, but it also extends over the property that was damaged.

This can be very helpful for small businesses as the cost of property damage is covered, saving the company from any inconvenience.

Improving employee retention and satisfaction

Employee retention and employee satisfaction are two of the major factors in defining a company’s reputation. Especially for small businesses that aspire to grow.

Worker’s compensation insurance guarantees the employees wage and medical welfare in case of any misfortune, motivating them to work with zeal and vigor.

March 20, 2020 · Tim Kevan · Comments Closed
Posted in: Uncategorized