Many business owners believe that because they only have part-time or temporary workers, they don’t need Workers’ Compensation insurance. It’s important to understand who qualifies as an employee, because the true definition has expanded over the years. By definition, an employee is someone who is hired to perform services under the direction or control of another person or company. Even someone who is doing a one-time job for a company, if the job is done under the company’s direct supervision, that person could be considered an employee. An independent contractor could also be considered an employee for purposes of coverage under a Workers’ Comp policy, even if they are not technically on your payroll.
Just think: even in the safest and cleanest work environment, accidents happen.
Most states require Workers’ Compensation insurance, but the laws can vary by state. Businesses that meet certain requirements must provide Workers’ Compensation or face fines and other serious consequences. However, the most important reason to carry this coverage is not just because it is required, but because it protects the business and your staff.
Just think: even in the safest and cleanest work environment, accidents happen. Workers’ Comp Insurance protects a business from lawsuits resulting from work-related injuries. The coverage is designed to ensure that staff who are injured, disabled or even killed on the job are provided medical care and compensation, regardless of who is at fault. The beauty of Workers’ Comp is that it negates the need for lawsuits. There is even coverage for dependents of workers injured on job.
When hiring contractors, it is vital to make sure they carry the appropriate insurance and provide proof. They should have coverage on their employees and coverage for damage caused to your property by their actions. A business owner might decide to hire a friend or relative to save a little money on a move or some side work. Unfortunately, people are very litigious and if they are injured and the business owner doesn’t have the appropriate insurance in place, the owner could be spending more than expected on medical bills and lost wages.
There is not one policy out there that covers all claims. There are several different types of policies that business owners need to protect their assets and be in compliance with laws, lease requirements and agreements. Another very common policy for a business owner is General Liability – very important coverage, but different from Workers’ Comp. General Liability excludes coverage for injuries to staff who would qualify for coverage under a Workers’ Comp policy, even if such a policy is not in force.
The premium for Workers’ Comp is based on annual payroll. For this reason, most owners and officers of companies choose to exclude themselves from coverage. For one, an owner will not submit a Workers’ Comp claim if they get injured on the job (they will just use their health insurance), and it also lowers the premium. At the end of the year, the insurance company will audit payroll and adjust the premium up or down, depending on the actual numbers. They will also amend the current policy to be in line with the audited payroll. Workers’ Comp is a vital, reasonably priced product.
When deciding on an agent to help with procuring insurance coverage, choose one who is experienced in claims-handling and understands the tanning industry. The tanning industry relies on staff showing up healthy and ready to work. If someone gets hurt on the job, they should get the best care possible, for their benefit as well as the owner’s.
