Worker’s Comp Insurance or Worker’s Compensation Insurance is an insurance policy that provides employees with wage and medical benefits if they become injured or ill at work.

With worker’s compensation insurance, you provide your business with the coverage needed to take responsibility for injuries suffered by your employees on the job. For small companies, this type of policy can pay for employee replacement wages and medical expenses, which would be a substantial cost for your company if it had to come out of your pocket. Worker’s compensation insurance can also help protect your business by providing funds for legal expenses if your employee would decide to sue your company rather than receive benefits.

When Should You Purchase Worker’s Compensation Insurance?

Many states require employers to have Worker Compensation coverage at the time of hiring their first employees. Employer obligations vary by state but, for example, if you have one or more full-time or part-time employees are required to have worker’s compensation insurance. Pittsburgh business owners can benefit greatly from worker’s compensation insurances by keeping their employees and their business safe.

Carrying workers compensation insurance can significantly benefit your company whether your state requires it or not, so be sure to check what your employer obligations are so that you can stay in full compliance with the law. Just like you insure other valuable like your car and your home, it is essential to have a policy in place to ensure your employees are taken care of and your company is protected in the event of injury or illness.

Worker’s Compensation Insurance Laws

In some states, only businesses with a certain number of employees are required to carry worker’s compensation insurance. Some states only require coverage when your company has a certain amount of employees. For example, in Arkansas, if you have three or more employees, you are required to have worker’s compensation insurance.  In states like Ohio, if you have one or more employees, you are required to carry worker’s compensation insurance.

The industry your company operates in also plays a role in the regulations you must follow for worker’s compensation insurance. For example, roofers in California are required to have a worker’s compensation policy in place whether they have employees or not.

Consequences of Not Having Worker’s Compensation Insurance

If you live in a state, such as Texas, where worker’s compensation insurance is optional, then you will not suffer a penalty. Keep in mind, if your employees are injured on the job, they can sue your company.

If you live in a state such as Pennsylvania and you decide not to purchase a worker’s compensation policy, you can face steep fines that could be detrimental to your business.

Non-compliance penalty and price from state to state vary, but in most cases, you may face consequences such as:

• Being required to pay fines that accrue each day your business goes uninsured
• Being sued by the state for noncompliance
• Facing felony charges and going to jail if you are a repeat offender

Additionally, without worker’s compensation insurance, you will have to pay legal expenses to defend your business in court, and you may also be required to pay out of pocket for your employee’s medical expenses.