Small business owners have many expenses that range from paying employees to purchasing inventory. Factor insurance costs into the equation and you may be tempted to skip coverage that isn’t legally required in favor of saving money. However, skipping workers’ compensation insurance can be disastrous, especially if any of the following applies to your business.
You Operate in a Certain State
Before you decide to pass up a workers’ compensation policy, check state laws. While some states don’t require small businesses to provide coverage, others do. In most cases, whether you’re required to purchase a policy depends on how many employees you have and the type of business you own.
You Run a High-Risk Business
Even if you aren’t required to purchase a policy, certain types of businesses should have coverage anyway. Employees of home improvement companies, construction companies and distribution centers are at a higher risk of injury than those in less physical fields.
You Want Good Employees
Just as you want your employees to be loyal and hard workers, your employees expect you to be loyal to them. Purchasing workers’ compensation coverage shows you care about their well-being and will do your best to be in their corner if they are injured.
Good workers’ compensation insurance is beneficial to you and your employees but only if you purchase it from a reputable agent. Always verify a company’s license before purchasing a policy.