Did you know that the last state to pass a workers' compensation law was Mississippi in 1948?
That might seem like a pretty unremarkable factoid, but if you think about it, this means that within the lifetime of some people still living, if a worker got injured while on the job, they could very well have been left to the wolves and fallen into destitution from being unable to pay for medical expenses or support their family due to lost wages.
Fortunately, we now inhabit a very different world from the days when workers were merely thought of as a means to an end and for a company to make money at the expense of everything else.
Nowadays, workers' compensation insurance is not just a legal obligation for all jurisdictions throughout the country but a vital part of the modern zeitgeist and how we look and treat those who form the backbone of the nation and create the things we all want and need.
This article explores several reasons that make this type of insurance not just a lawful obligation but one that creates a desirable and safe workplace and ensures that anyone who is simply trying to make ends meet feels safe and functions efficiently.
It's an easy and affordable process
Let's start with an obvious reason for getting this insurance (outside of the legal reason), which is that it's such an easy type of insurance to take out that there's really no excuse not to.
In fact, if you check out trupointco.com, you'll find that you can actually discuss your situation with a dedicated workers' compensation insurance provider to ensure that you take out a plan that's tailored toward your specific requirements.
This is a great way to get insured and keep your employees safe without having to spend money on features and policies that are irrelevant to your industry.
For example, a business operating construction sites will require a different policy to that of one operating inside an office block.
This makes the entire process much easier to navigate (both when taking out the policy and making use of it if needed) and far more affordable for smaller companies that don't need as many bells and whistles as larger ones might.
Protects employees from work-related injuries
The funny thing about insurance of any kind is that it's one thing that you want to buy in order to cover you, but it's not something you ever want to use!
As such, it has the knock-on effect of ensuring that businesses put in place a large number of work-safety-related programs to teach members of staff how to remain safe.
Although you probably already have plenty of procedures and programs in place to deal with this topic, the mere fact that you may be on the line for any injuries that occur during working hours can make an employer think doubly hard about how to make sure all employees understand safety protocols.
Reduces financial risks for businesses
You, as the employer, are fully responsible for what happens in your business.
In the end, the buck stops with you, and if you have chosen to flout the law or failed to invest in inadequate safety training and materials, you will be responsible for whatever damages come your way regarding the litigation.
And, as is always the case with litigation, these costs can be substantial.
In fact, for smaller enterprises, they can even be enough to shutter the businesses entirely, putting you and all your other employees out of work.
Not only this, but ending adequate coverage makes you compliant with the law and, as such, not liable to fines and other penalties that come from disobeying Uncle Sam.
Ensures compliance with legal requirements
Speaking of legalities, as we mentioned in the introduction and partially throughout this post, workers' compensation is actually a legal obligation for all businesses that hire people.
Obviously, there is some nuance to this; notably, there are some exceptions, such as:
- Independent contractors
- Volunteers
- Some agricultural workers
- Certain types of employees in small businesses
Moreover, each state has varying legalities surrounding it, so if you're unsure how to proceed, your best option is to check your state's labor laws, which you can usually find on the Labor Department website.
Covers medical expenses for employees
Now, let's move on to perhaps the primary reason for this insurance existing in the first place.
Injury can happen at a moment's notice, and even when there's nobody to blame, it can massively disrupt an employee's life.
Consequently, as a business owner, you have a moral obligation to ensure that if anyone under your employ becomes injured while carrying out their predefined duties, they ought to be entitled to compensation that at least covers medical bills and lost wages (more on that later, though).
While claims could be denied if the employee was found to be negligent or dismissed, warnings put in place to ensure workplace safety are generally quite rare.
Regardless, as medical costs continue to rise unabated (which is certainly not a debate for this post), they can put a massive strain on the lives of those who have placed their trust in you.
Provides wage replacement during recovery
It's not only the financial burden of having to deal with vast medical costs but also the impact of lost wages from being out of work while you recover.
Workers' comp usually covers a percentage of an employee's regular weekly income, which is usually about two-thirds, should they be unable to work due to a job-related illness.
This helps somewhat offset the revenue lost during the healing process, which can be invaluable for those in single-income homes or really anyone who has to provide for a family regardless of income status.
Depending on the kind and degree of the injury, benefits can be for temporary whole disability, temporary partial disability, or permanent disability, with the different options being weighed up by the insurer and how much it impacts their life.
Usually, payments run until the employee can go back to work, and they ought to be covered for the entirety of their time away from work.
Enhances employee morale and loyalty
When an employee knows that the company they work for has invested in the best compensation policy possible, they are far more likely to remain loyal and feel as though their needs are met in terms of safety.
Additionally, since you are also more likely to put in the extra effort to ensure workplace safety out of a desire to keep your team safe, they will perhaps also put in more effort to follow the various procedures you put in place to keep everyone safe from injury.
Knowing that one is covered, should an injury arise while working, gives one confidence and peace of mind.
This promotes a positive workplace, which raises job satisfaction, morale, and loyalty by itself.
Essentially, employees who feel appreciated and cared for perform better and are more likely to sing your praises, raising a favorable brand profile for your company.
Purchasing workers' compensation shows a dedication to their welfare and helps to draw and keep top personnel.
Mitigates potential lawsuits against employers
The dreaded lawsuit is something that no business ever wants to have to deal with as it can wreak havoc on company finances and employee morale and, arguably, waste of all, can cause a drop in reputation as a brand.
Because nobody looks into things more deeply than what the headlines say, it can have a seriously damaging effect when they see that employees have been injured on the job.
Having worker's compensation provides you with peace of mind that if the accident does occur, you will be covered against litigation and that your employees will be looked after.
However, you do need to note that simply having this sort of insurance won't make you entirely immune to litigation, as there are exceptions and other nuances that could put a ripple in proceedings.
Nonetheless, if an injury happens on your watch, things will go far more smoothly when you have an insurance provider taking the necessary steps.
Supports a safer workplace environment
Although principally focused on post-injury care, workers' compensation insurance indirectly creates a safer workplace by motivating companies to give accident prevention the highest priority.
Employers are more motivated to invest in safety measures, including increased training programs, better equipment, and the use of safer work practices, since they bear responsibility for the expenses related to worker compensation claims.
Moreover, workers' compensation coverage helps to lower employees' anxiety of retaliation when they report injuries or hazardous working circumstances, enabling the discovery and control of such risks before they may cause major accidents.
Additionally, the fact that companies with fewer claims and accidents usually pay lower insurance rates offers another financial incentive to keep workplace safety under constant improvement and reduce the risk of injuries.
There are numerous reasons for businesses to invest in a compensation policy that matches their specific requirements.
Aside from the usual legal obligations, it ensures your employees will be looked after if involved in an accident causing serious injury and keeps everyone happy that they are valued members of the team.