Workers Compensation Insurance: Your Biggest Questions, Answered
Your company has expanded. But how do you decide that it's time for workers compensation insurance to cover it?
You can need workers compensation coverage when you hire one or more people (even on a part-time basis). Most states require business owners to implement this policy, so it is worth understanding the basic criteria of the state where you work. If you recruit a first employee.
What is Workers Compensation Insurance?
When an employee is sick or wounded when working for you, workers compensation - also known as workplace liability insurance - will offer financial security to the company.
Claimed salaries, medical charges, rehabilitation and even death benefits cover workers' compensation insurance. Employee benefits may provide much needed insurance, as such coverage prohibits an employee from suing the company for accidents at work.
What Does Workers Compensation Insurance Cover?
The way workers compensation insurance works, this insurance will cover health expenses and wages missed if an employee is injured in his work.
More specifically, workers compensation can cover:
- Payments of Medicine
- Lost Wages
- Expenditure for rehabilitation.
- Benefits of death
Workers compensation insurance does not cover:
- Accidents with customer or seller
- Fines for OSHA
- Improved safety at work
- Salaries for an employee who replaces the injured
Who Needs Workers Compensation Insurance?
You are legal to take out workers' compensation insurance regardless of whether you hire a full-time employee, a part-time employee, or a subcontractor. Keep in mind that the coverage you may have will be determined by your state.
An important note. If your State is an individual corporation or agency, it does not require you to cover your subcontractors.
Who Pays for Workers Compensation Insurance?
The company owner (you're here!) pays the policy premium. When an employee is injured,hurt or sick, the compensation insurance for the employees can take part in the work. Your insurance company will be able to pay up to the coverage limit all expenses and claims related to the disease or accident.
Is Workers Compensation Insurance Based on Payroll?
How many employees in your business you pay for workers compensation insurance may affect how much you pay. Think of it in this way: in case anything happens to them, the more workers you have you will need protection.
You should expect to see the amount of full-time and partial staff in your company while shopping for workers compensation insurance. The number of sub-contractors or consultants that you deal with may also be necessary. You do not need to cover subcontractors or consultants working with your own companies.
Is Workers Compensation Insurance Tax Deductible?
Tax compensation payments are considered deductible for the workers' compensation policy. The IRS considers the policy premium to be an entrepreneurial cost, which can be deducted from taxation. If you want to learn more about the deduction of your insurance premiums on the income taxes of your company, please ask a tax preparer or accountant for advice.
Is Workers Compensation Insurance Required By Law?
You may be legally obliged to provide workers compensation coverage while dealing with employees (even subcontractors). The minimum coverage is state-by-state, so you can begin shopping for workers compensation insurance as soon as you are ready to start recruiting. You can receive a certificate as evidence that your company has coverage when you purchase workers' compensation insurance.
What Is a Workers Compensation Certificate and Why Do I Need It?
A certificate of insurance (COI) offers evidence that your company is covered in the event of injury or sickness in the workplace. You should explain to third parties that you are legally obliged to cover your workers' compensation insurance. For instance, if you need a government contract to have workers compensation insurance, it could enable you to land the project by showing your certificate.