Why Your Workers’ Compensation Policy Is So Important

Many states require you to maintain a workers’ compensation policy for your employees. But even if you’re not legally required to purchase workers’ compensation insurance, it can still be a valuable investment for your business. Here’s why.

What Does Workers’ Compensation Cover?

Workers’ compensation insurance provides coverage to your employees in the event of a work-related illness, injury, or death. Policy details vary, but a typical workers’ compensation policy will cover things like:

• Medical expenses, including doctor bills, emergency room visits, and medication
• Lost wages for the period the employee is recovering
• Ongoing care costs (such as physical therapy) for severe injuries
• Rehabilitation benefits to help employees return to the workplace
• Wage replacement for workers who are unable to return to work at all
• Funeral costs for fatal work-related accident
• Death benefits that extend to the employee’s beneficiaries

Of course, these benefits only apply to accidents or injuries directly stemming from the employee’s job. Workers’ compensation cannot be used for any illness or injury that occurs outside the job site.

Why Workers’ Compensation Is Important for Your Business

Is a workers’ compensation policy right for your business? It certainly provides your employees with a lot of protection. But workers’ compensation provides several practical benefits for businesses as well.

Legal Compliance

For starters, workers’ compensation may be a legal requirement. Some states, such as California, require business owners to maintain a workers’ compliance policy for their workforce. Investing in workers’ compensation insurance can ensure that you remain in compliance with regulatory standards.

Legal Protection

In addition to complying with state standards, workers’ compensation insurance can protect you from legal complications arising from a workplace injury. Workers’ compensation will shield you from lawsuits and prevent an extended legal battle.

Cost Control

Workers’ compensation will aid in keeping operating costs down. That’s because, with the right policy, you can manage the costs of accidents and injuries while streamlining the claims process. By treating insurance premiums as a manageable expense, you may be better equipped to implement prevention programs and employee training.

Employee Retention

Business leaders can improve retention rates by offering a robust benefits package to their workers. Providing workers’ compensation insurance can help you attract and retain your best employees, showing that you care about their well-being. 

Workplace Safety

Instituting workers’ compensation insurance can be the start of an entire set of workplace safety policies and initiatives. Some insurance providers can even provide guidance on the best practices for prevention and risk mitigation. Investing in a workers’ compensation policy, therefore, allows you to improve workplace safety while reducing the cost of actual incidents. 

Business Continuity

One of the benefits of workers’ compensation insurance is that it provides wage compensation and rehabilitative services to help workers return to their jobs. That’s good news for business owners. These benefits can encourage workers to remain under your employ, ensuring continuity of operations once they’re back to full health.

Manage the Cost of Workers’ Compensation

Admittedly, small business owners may struggle with the added cost of insurance premiums. However, these policies can save money in the long run by mitigating the cost of workplace accidents. 

To save money, you might consider Simpay’s dual pricing program, which allows you to charge separate prices for cash and credit card purchases. Doing so can mitigate the cost of credit card processing, allowing you to reallocate funds for operating expenses such as insurance premiums.