Understanding the Need for Workers Compensation Coverage

Erin was filled with an entrepreneurial spirit and like her parents before her, was intent on being her own boss and starting her own company. About 25 permits and license applications into the process, she found her spirit lagging but nevertheless was determined to press forward. The concept of protecting herself and her business from liability was a complex one, she knew, so Erin wisely sought the guidance of a professional insurance agent to explain the intricacies of coverage to her. Her first question: “What is workers compensation insurance and why do I need it?”

Erin’s agent explained that the policy is a type of protection for employees who are injured or become ill or disabled in the course of working on the job, providing for medical benefits and wage replacement, and even benefits that are paid to the dependents of workers who are killed while on the job. Those who are permanently injured receive compensation intended to provide for loss of income related to the accident. Also, once a business has four or more employees, in most cases coverage for the company is required by law, explained her agent.

A tradition continued

Erin’s hard work and dedication to details paid off–after just four years, her business was thriving. What’s more, her early question about “what is workers compensation insurance?” paid off when one of her employees injured his back while trying to move a stack of heavy boxes from a high shelf and was off for five months recovering after surgery, physical therapy, and rehabilitation. Erin’s coverage paid the expenses associated with the claim, and the return to work program her agent helped Erin maintain a positive connection with her injured worker. The open, easy communication enhanced the company’s ability to stay abreast of all required paperwork and facilitated the employee’s smooth return to the workplace without any additional delay. Furthermore, Erin’s agent made sure that she had the correct amount of coverage to ensure her business had the appropriate amount of protection as well as would not violate laws, leaving her open to financial penalties. Her agent also helped Erin figure out loss control tactics that would help eliminate risks on the job-for one thing, putting a limit on the number of heavy boxes employees are able to remove from shelves at one time, and training employees on the do’s and don’ts of lifting in general.

Talk to your agent about safety programs and coverage requirements so that, like Erin, you can help ensure your business and your employees are well protected.