Workers compensation insurance protects your company against liability in case one of your employees is injured or contracts a serious illness as a result of the work. Find out if your company needs this policy!
Scottsdale workers compensation insurance protects your company against liability in case one of your employees is injured or contracts a serious illness as a result of the work. This could be anything from a fall that causes a knee injury to an employee developing cancer after exposure to radiation. If one of your employees is injured on the job, you could be liable for the medical bills and lost wages that result from those injuries.
Workers compensation insurance is not the same as the other business insurance you might buy. It doesn’t protect you from general liability from your products or services. It protects you specifically against claims brought by injured workers.
Arizona State Law
Every state has different laws on what businesses are required to carry workers compensation insurance. Every state except Texas requires workers compensation insurance, but different states have different laws on which businesses must carry what insurance. In many states, businesses with fewer than three to five employees are not required to carry the insurance.
Whether you own a business in Scottsdale or some tiny town in Arizona, state law says that you have to carry workers compensation insurance if you have at least one employee — beside yourself, of course. The law applies to both public and private business, but it provides an exemption for domestic servants, working partners and sole proprietors. That means that you don’t have to buy workers compensation insurance if you work for yourself or hire household help. You also don’t have to purchase worker’s compensation insurance for your partner, who is essentially an owner like yourself.
Foregoing Insurance
You have the option to cover your own financial liability in place of buying workers compensation insurance. However, doing so would be a foolish decision. A single workers compensation claim could easily be worth hundreds of thousands of dollars. Even one claim could devastate your small business.
It is far better to purchase workers compensation insurance and protect your Scottsdale business.
Calculating Premiums
The reason some small business owners are tempted to forego workers compensation insurance and pledge financial responsibility instead is that they worry about the cost.
Many factors go into calculating premiums, including your business’ industry, your location and how much coverage you want to get. For example, you might decide to cover a higher percentage of lost wages, or your might decide to cover funeral costs in case of accidental death. There are a range of options you can include in your coverage, all of which can increase your premium.
The National Council on Compensation issues codes for different industries to evaluate their risk. If your business is coded for high risk — such as manufacturing or trucking — you will pay higher premiums.
Rates are typically set for three years, and then they are re-evaluated. If you have a low number of claims during that time, your premiums could be lowered. If you develop safety programs or take other proactive measures, your premiums could be lowered.
No matter how much you have to pay for workers compensation insurance, it is an essential business expense that you can’t overlook. Smart Move Insurance sells a variety of Scottsdale business insurance products to meet the needs of your business, including workers compensation insurance. Contact us today to talk about your options and to get a quote for a plan that will provide your business and your workers the protection you need. If you are purchasing multiple insurance policies, you may even quality for a discount on your premium.
