4 myths about Workers’ Compensation Insurance. In the US, one in five businesses closes within the first year. Workforce-related issues are among the reasons for failure. Here are some myths associated with workers’ compensation insurance that can be devastating to small businesses.
- My employees are like my family and will never sue me
It’s great to see employees as part of your own family. A fraternal atmosphere facilitates work relationships and productivity. However, without questioning the loyalty of your employees, in the event of a major accident or if a worker dies, it may be their relatives who decide to sue you. On the other hand, insuring your employees is a commendable way to show them the respect they deserve.
- Only large companies need workers’ compensation insurance
Depending on the type of business, it may be mandatory to have workers’ compensation insurance. For example, in the case of construction companies, it is mandatory. It is also mandatory for companies with more than four employees. However, even if your company is much smaller, having such coverage can mean the difference between staying in business or closing down.
- I don’t need workers’ compensation insurance if my employees are independent contractors
Although you are correct that independent contractors are not eligible for this coverage, if a contractor lacks insurance and is injured while working on your company, the liability falls on you. This independent contractor can sue you and, from then on, the insurance company may also charge you a premium for these contractors when they audit your policy each year.
- Workers’ compensation insurance is expensive
When a company that is required to have workers’ compensation insurance lacks it, they violate the law and face a work stoppage order and a fine. The cost of the mandatory stoppage and fine may exceed the value of the insurance premiums they failed to pay. For companies that are not required to have this insurance, it is beneficial to have it for the benefits it provides and it is not a very expensive insurance. If you have doubts about commercial insurance, contact Univista Insurance. 4 myths about Workers’ Compensation Insurance.