Owning a business can expose you to a number of different financial risks. While it can be easy to focus on the threat of your business failing to be profitable or facing litigation from your customers, some individuals may not fully appreciate the risks that can come from having employees. Fortunately, there is workers' compensation insurance that can help to protect you in the event that one of your workers is injured while at work.
What Will Workers' Compensation Cover?
Workers' compensation will protect you from having to pay for the medical or death expenses associated with an employee related accident. In addition to paying for the worker's medical expenses, these policies also often include partial wages for the duration of the recovery period. However, the exact offerings of these policies can vary greatly due to the different regulatory requirements in each state.
What If You Do Not Buy This Type Of Protection?
Sadly, there are some individuals that may attempt to save money by avoiding buying this type of insurance. Making this mistake can prove to be extremely costly for an enterprise. In addition to paying for the medical expenses of the employee, it will also be necessary to hire a defense lawyer as your enterprise may face lawsuits from the injured employee and regulatory penalties from the government. When these potential costs are considered, investing in this type of policy is far more than worth the monthly premiums.
What Factors Determine The Cost Of This Type Of Coverage?
Due to the unique attributes each enterprise can have, there are a number of factors that can influence the costs of buying this type of insurance. For example, there are many insurance providers that will consider your previous claim history. This is done to approximately measure the risk of working at your enterprise. As a result, ensuring that your employees have adequate safety procedures can help prevent the need for these claims, which can help your enterprise to save money. Additionally, the number of employees at your enterprise will also play a role in determining the price of your policy as an enterprise with more employees may be at a higher risk of needing to file this type of claim.
Protecting your business against the financial risks that can accompany having employees is a critical need for any employer to address. By understanding the type of coverage that workers' compensation policies provide, the risks of not having this insurance as well as the factors that determine the cost of this policy, you will be better able to be an informed consumer when shopping for this type of coverage for your enterprise. To learn more, contact a company like Brown & Brown of Prescott.