Small businesses should be aware that they may have a legal obligation to carry workers’ compensation insurance. Depending on the state, businesses may be required to purchase workers’ compensation coverage or post a surety bond if employees are injured while on the job. 

In addition, small business owners should understand how workers’ compensation works and what types of benefits their employees may receive in the event of an injury. You can click here to seek the legal advice of a workers’ compensation lawyer to understand further about your legal obligations. 

Here are some important things small businesses should know about workers’ compensation. 

  • Workers’ compensation is a form of insurance that provides money to employees who are injured while on the job. It typically covers medical expenses and lost wages in addition to providing compensation for occupational diseases or death benefits for families of workers killed in workplace accidents. 
  • Most states require employers to purchase workers’ compensation coverage for their employees. Workers’ compensation coverage is typically provided by an insurance company, but some employers may opt to self-insure. Self-insuring involves setting aside money to cover workers’ compensation claims instead of paying for a policy. 
  • Small business owners should also be aware of the various types of benefits their employees may receive if they are injured while on the job. These include medical benefits, wage-loss benefits, death benefits, and vocational rehabilitation. Medical benefits provide money to cover medical expenses related to the injury such as doctor visits, hospital bills, prescription medications, and physical therapy. 

Wage-loss benefits are available to employees who are unable to work due to their injuries and provide a portion of their lost wages. Death benefits provide money to family members if the employee is killed in a workplace accident. Lastly, vocational rehabilitation benefits provide money to help employees return to work or retrain for a new job if they are unable to do their prior job due to their injuries. 

  • Small business owners should also understand common workers’ compensation exclusions and limitations. Generally speaking, states exclude certain types of workers from being covered by workers’ compensation such as independent contractors, domestic workers, and agricultural workers. Additionally, employers may be exempt from purchasing workers’ compensation insurance if they have fewer than a certain number of employees. Lastly, many states limit the amount of money an employee can receive in benefits for a workplace injury or illness.