Starting a new business can be a daunting process. In many cases, new business owners must not only deal with the task of getting the organization off the ground, but also establishing proper insurance requirements. But what exactly are the insurance needs for a start-up company—for example, is workman’s compensation a must? Those who are establishing a new organization should familiarize themselves with the basics of workman’s compensation, when it is needed, and how it can be beneficial.
What is Workman’s Compensation?
As suggested by the name, workman’s compensation is a type of insurance policy that pays the wages for men and women who are injured while performing the tasks required by their job. In addition to covering weekly wages, workman’s compensation may also cover medical bills and other similar expenses that occur as a result of an injury on the job. Finally, general damages for pain, suffering, and employer negligence may also be included in a workman’s compensation package. Depending on the severity of the injury and the specific insurance plan, these payouts may vary quite a bit.
Who Needs Workman’s Compensation?
Obviously, workman’s compensation packages are a must for large corporations who employ hundreds, or even thousands, of workers. But what about a relatively small start-up company that is just getting its feet off the ground? According to Entrepreneur, nearly any company that has at least one employee is required by US regulation to provide workman’s compensation insurance. Of course, there are always exceptions—for example, businesses in Texas and New Jersey are not, at least in theory, required to have a compensation policy. In addition, start-ups that are owned by sole proprietors or are filed as partnerships may not need to possess a workman’s compensation insurance plan.
Benefits of Workman’s Compensation
Though there is a small group of start-ups that are not required by law to have workman’s compensation, there is no question that they can still benefit from the insurance plan. In fact, there are a number of perks associated with having a workman’s compensation policy—including the protection that it offers in the event that an accident does occur. Similarly, employers that possess workman’s compensation plans are often more attractive to potential workers, as they may be used as part of the benefit package. It may also be useful as a basic insurance plan for sole proprietors who cannot afford medical insurance for themselves.
Establishing Workman’s Compensation
In most cases, start-up business owners who are interested in purchasing a workman’s compensation insurance plan can do so by consulting with any professional insurance agent. Some states, however, do require employers to work with specified state-run grants when applying for workman’s compensation insurance. Those who are unfamiliar with these types of insurance plans should be sure to speak with an expert in the field of workers compensation. In most cases, these professionals can provide assistance when it comes to choosing the best plan for the company.
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About the Author:
Andrew Miller is a passionate member of the End Ecocide movement, an avid legal blogger and Environmental Law Student. He has worked in marketing for over a decade and finds his passion in bringing concepts to life. As a Socialpreneur, he is an agent for positive social change through both his writing and business endeavors.