Workers compensation insurance refers to a form of insurance that employers purchase to cover injuries and illnesses related to employment. Many states mandate that employers purchase a workers compensation insurance policy, so that employees who have been injured on the job receive payments.
Here’s more about the importance of workers compensation insurance.
Protects Employees And Their Families
One reason workers compensation insurance is important is that it protects employees and their families. In the event an employee suffers a work-related injury and cannot go to work, the workers compensation insurance policy will replace the wages of the employee during the recovery period. The insurance policy will also provide financial assistance for any medical care the employee needs. As you can imagine, lost wages and high medical bills can put a lot of stress and hardship on an employee and their family. Therefore, workers compensation insurance is a must for ensuring the well-being of your employees.
Protects Your Business
Another reason to have workers compensation insurance is to protect your business. Most workers compensation insurance policies provide financial assistance for lost wages and medical costs in exchange for the employee forfeiting their right to sue their employer. Workers compensation insurance will also protect your business by assuming responsibility for medical costs. These costs can be sky-high, depending on the severity of the injury or illness.
To ensure maximum protection of your business, it is important that you purchase a policy that is sufficient for your workplace. Having sufficient workers compensation insurance can mean the difference between your business staying afloat or going bankrupt.
Often Mandated By Law
Another reason why workers compensation insurance is important is that it is mandated by law in most states. In these states, the failure to purchase workers compensation insurance is viewed as a criminal offense. Punishment for this criminal offense varies by state. For example, in the state of New Jersey, the punishment is a maximum fine of $10,000 or imprisonment for a maximum of 18 months.
In our state of Texas, workers compensation insurance is not required by law. However, workers compensation insurance is still highly recommended. Plus, construction companies that work for the federal government are required to have workers compensation insurance — regardless of the state law in which they are based or work in.
Workers compensation insurance is important for the protection of the best interests of your business and your employees. For more information about workers compensation insurance, don't hesitate to contact us.