Workers’ comp policy is a state-regulated insurance system that covers the medical expenses and wages lost during period(s) of inactivity as a result of work-related injuries or sickness.
Most states, including Texas, do not require you to have a workers’ comp policy for your small business. Choosing not to pay for workers’ compensation may seem beneficial initially, but you may end up with an injury at work that keeps you out of work for a while, and there is no form of reimbursement or protection available. This is why it is mostly advised to get a worker’s compensation policy for yourself even if you have no employees.
2Important Reasons Why You Need Workers’ Comp
It covers the costs of injuries sustained at work
The majority of health insurance providers exclude medical expenses suffered at work, whereas workers’ compensation policies have no such restrictions. Of course, deductibles have to be paid first, but the insurance company pays whatever amount is incurred over and above the deductible. If you need to take a break because of illness or injury, your workers’ compensation will help cover the wages not paid.
It helps you get more contracts
In many states, if there is no substantial proof that workers have their own workers’ comp insurance policy, the company that hired them will be held responsible for any damages. This is why you need to carry your own workers’ comp if you want to be hired by any company. If you work as an independent contractor, most of your potential clients will ask you for a certificate of insurance before you start working. Protecting yourself with workers’ compensation is essential, especially if you work in construction sites and industries.
What If You Hire Contractors Instead of Employees?
You may opt out of workers’ comp for hired contractors and subcontractors. Some states fully support the exclusion, but many other states compulsorily require you to cover for anyone who works for you.
However, it is essential to note that even if you are legally excluded from purchasing workers’ compensation for employees, it doesn’t mean you won’t be held responsible if someone gets hurt while working for you. Therefore, if you have people working under you, instruct them to get their own insurance.
Other Inexpensive Options
There may be chances that your job requires you to carry a workers’ comp whereas you aren’t interested in buying it. In such cases, you can look for inexpensive options such as a ghost policy. A ghost policy is a type of workers’ comp for contractors who have no employees on their payroll. The policy acts as proof of insurance which is required by most projects without providing any real coverage.
Workers’ comp is not a legal requirement in most states. However, having it in place for your small business will cover you in the event of an unfortunate accident while helping you get more high-end contracts. If you have more questions related to workers’ compensation, talk to our experts at Family Financial Insurance Group. We are here to assist you with all your coverage needs today.