4 Things You Should Do When Purchasing Worker's Comp Insurance
Worker's compensation insurance pays for your employees' medical care if they're hurt at work. This type of insurance prevents you from having to pay for medical bills out of pocket, which means it's beneficial to both you and your employees. When you're just starting out as a small business owner, here are four things you should do as they pertain to worker's comp insurance:
1. Find out if you're legally required to have worker's compensation insurance.
The laws governing worker's compensation will vary by state. In some states, any business owner with even one employee is required to have this type of insurance. Other states only require worker's comp insurance once you pass a certain number of employees. For example, Arkansas only requires employers to have worker's comp insurance if they employ more than three people, according to Onpay. However, even if you're not required by law to have this type of insurance, it can still be highly beneficial. Having this type of insurance can save you from having to pay out of pocket if one of your employees is injured on the job. It's always better to be over-insured than under-insured.
2. Set aside enough money for worker's compensation insurance.
Once you've decided to purchase worker's comp insurance, you'll want to make sure you have enough money for it in your budget. According to Coverwallet, most modestly sized companies will end up spending about $2,000 or $3,000 on worker's comp insurance every year. This is a vital part of protecting your assets and employees, so it's very important that you include this expense in your budget.
3. Ask questions before purchasing your worker's comp insurance.
It pays to shop around while looking for worker's comp insurance. You want to make sure you get the best possible deal, and comparing various policies can help you do that. The language of insurance policies can be difficult to understand, so don't be shy about asking questions. The insurance representative you speak to can help to clarify anything that's unclear. You should have no questions left unanswered when you finally purchase a policy.
4. Be well-informed about the limitations of worker's comp insurance.
As an employer, you may be in a position to have to educate your employees on worker's compensation. Understanding the policy you purchase will be highly beneficial to you. Make sure you know what the limits of your insurance policy are. Most policies have a cap on the amount of money they'll pay out to the employees of any particular policy holder. If you have a particularly large staff, you may want to purchase a policy with higher limits to safeguard against multiple accidents. For more information, contact companies like Professional Risk Organizers, Inc.