Workers' Compensation Insurance 101
Injuries can happen even in the safest working conditions. Because of this, workers’ compensation insurance has become a staple risk management initiative in business. The basic risks, however, can still elude business owners. Here are a few questions to help you understand what you need in workers’ compensation coverage and why.
What is Workers’ Compensation Insurance?
This insurance is designed to protect you, your employees and your business from any possible on-the-job accidents, illnesses, and even death. Workers’ compensation insurance is required to cover medical costs and lost wages for workers who experience work-related injuries.
Who needs Workers’ Compensation Insurance?
Every business owner in California with one or more employees is required by law to have workers’ compensation insurance. Failure to provide workers’ comp coverage will result in costly penalties that could financially disable any business.
What is the worst that can happen if I don’t have Workers’ Compensation Insurance?
Needless to say, workers’ compensation insurance provides crucial financial protection for you and your business. Here are a few of the ways that you can be held liable or incur punishment for not maintaining coverage:
Section 3700.5 of the CA Labor Code defines failure to have workers’ compensation coverage as a misdemeanor. Punishable by imprisonment of up to one year in the county jail and/or fines of at least $10,000. In addition the state has the right to penalize illegally uninsured employers up to $100,000.
An additional fine of either $1,500 or twice the amount of the cost of a workers’ comp premium for each employee during the uninsured time.
Covering medical expenses if one of your employees was injured or sick while not having workers’ comp insurance, despite whether or not your employee has medical insurance coverage.
Paying the legal fees that incur if an injured employee sues you, which they have the right to do.
Injured employees may also be entitled to a percentage of their regular wages while they are unable to work.
What should I do to avoid fees and penalties?
Ensuring that your company has a good policy is worth avoiding the devastating claim, lawsuit, state penalty fees and possible jail time. The consequences are substantial, do not wait until your employee has a work-related injury or illness, get covered today. If you would like to learn about workers’ comp coverage, we are here to assist you in finding the best policies available and minimize your risk while saving you money.