Workers' Compensation - Do I need it?

When you buy a house or a car, one of the first things that comes to mind is purchasing insurance to protect the asset. Included in the insurance is liability coverage to protect against lawsuits for bodily injury or damage that you could cause.

Your business is an asset too and insurance is purchased to protect inventory and business income. The insurance also protects from lawsuits that could come from customers and clients. While focusing on your clients, you might overlook your employees. What if one of them were to get hurt, would your business insurance cover this?

The answer is no. Your business insurance (also known as a package policy or a businessowners’ policy [BOP]) would not protect against workplace injuries. A separate policy must be purchased, known as workers compensation.

This policy provides three sections, 3A, 3B, and 3C. 3A provides medical and disability payments mandated by the state (or states) listed on the policy. The policy also provides lost wages and salaries depending on how long the employee is out of work. 3B provides coverage for if your employee sues you due to negligence on your part (but they can’t collect workers’ comp if they lose the suit) and 3C provides coverage in other states.

Workers’ compensation is a complicated yet important coverage that all businesses should have. As always, you should call your agent at Coffey Insurance to discuss your workers’ compensation policies, and the coverage it provides.

Until next time….