Why Should a Business have Workers' Compensation Insurance?

Insurance is one way of transferring financial responsibility from a business to an organization that pools large amounts of funds to satisfy loss from damage or injury. By collecting relatively small amounts of money, in the form of premiums, from a large number of contributors, the insured, insurance carriers are able to satisfy the financial responsibility that result from injury or damage.

Workers’ compensation insurance is one way all business employers can help protect the people that work for them. Employers have a legal obligation to provide a safe environment for their employees, and to provide restitution if any of those employees suffer injury or illness while at work or on the job. Even in the safest of work environments, employees can get hurt and need financial assistance to recover, both physically and financially. Workers’ compensation insurance provides the sole remedy when an employee is injured, except in cases where the workplace is known to be unreasonably hazardous.  The latter is another segment of the Compensation coverage, referred to as Employers Liability; To be covered as another subject. The Workers Compensation law provides for a cap on compensation as stated in the individual State’s statutes. If workers compensation is not in place at the time of an injury, there is no limit a claimant can seek as compensation for an injury.   Workers Compensation laws also require employers or their insurance carriers to provide wage replacement payments, medical expense reimbursements and other benefits to employees who suffer a work-related injury or illness. The specific levels of compensation may differ between states, In Florida, all construction class employees must be covered by Workers Compensation insurance; for all other classes of business, , those with four (4) or more employees are required to provide the benefits.

Workers Compensation can save a business from bankruptcy if an employee gets seriously hurt on the job.  

Having proper workers’ compensation coverage is more than just a cost of doing business. It is a caring way to protect employees. When considered as part of a comprehensive workplace safety program, it is a strategic investment in a business’ most important asset – its employees.

Here are three reasons why it is important for your business to have workers’ compensation insurance:

1. It is required by State law.  it is important to understand how the laws apply to your business. In most cases, businesses can fulfill their workers’ compensation requirements by purchasing a policy through a local agent or carrier. Fortunately, Florida is not a monopolistic state like North Dakota, Ohio, Washington, and Wyoming, These States require businesses to secure coverage through state-operated funds.  Also, Florida does not permit employers to opt-out of traditional workers’ compensation insurance programs.

2. While being a known cost of doing business, Workers Compensation helps injured workers get the help they need, without the decision being made by the employer. Even the safest workplaces experience incidents that result in employees’ injury or illness.

Consider that there were 2.8 million nonfatal workplace injuries and illnesses reported by private industry employers in 2018.  These figures were relatively unchanged from 2017, according to the U.S. Bureau of Labor Statistics. The incidence rate for total recordable cases in private industry also remained unchanged from a year before.

 Also note that in the 2018: · Retail trade was the only private industry sector where the reported cases increased in 2018, increasing from 3.3 cases to 3.5 cases for every 100 full-time worker. This was the first increase in reported cases for the retail trade since 2003. Retail trade accounted for 14 percent of all injuries and illnesses in private industry in 2018. Within this class of commerce, there were over 900,000 injuries or illnesses that caused a worker to miss at least one day of work in 2018, much the same as for 2017.

 In 2018 the national estimates for emergency room (ER) and hospital visits for nonfatal occupational injuries and illnesses were over 333,000.

3. It protects your business. Workers’ compensation insurance helps businesses avoid the real cost of an employee’s medical expenses and lost wages following a workplace injury or illness. Without workers’ compensation coverage, the medical expenses associated with even one major workers’ compensation claim could cause irreparable financial harm to a business.  An experienced workers’ compensation insurer can provide access to valuable loss control services that may help reduce costly claims and keep premiums low. Through proactive professional claims management, it may also help your employees recover and return to work faster after an injury or illness – potentially saving you the costs associated with reduced productivity and the hiring of temporary workers.

Having proper workers’ compensation insurance coverage is a smart investment that protects your business and employees. Contact us for more information and guidance on what you need to know to make sure your business is properly covered.