Workers’ compensation is meant to benefit both employer and employee – the employer is protected against personal injury lawsuits while the employee receives benefits for injuries obtained on the job. Workers’ compensation benefits are generally received by an employee no matter who was at fault for their injury, and it may also provide funds for the families of an employee that died while on the job.
Workers’ comp insurance is mandatory for most businesses, but the laws vary by state. So, if there are few employees (or no employees), is workers’ compensation insurance necessary for the small business?
Is Every Business Required To Have Workers’ Compensation Insurance?
In most states, it is required by law for all businesses to have workers’ compensation insurance. If an employee is injured on the job, an adjuster from the insurance company will handle the workers’ comp claim and pay out benefits. The rules on workers’ comp is completely dependant on the state in which the business is operating, and no two states will carry the same laws on benefits, claims, or insurance policies.
However, most states will not require a business with no employees to have this insurance. For example, if the business is a sole proprietorship or partnership with no other people working for them (other than the owners or partners), workers’ comp may be optional. States may allow the sole proprietors and partners to acquire workers’ comp to protect themselves if they so desire, but do not demand companies with no employees to purchase the insurance.
Basically, if a company has any employees that are not owners, then they are required to purchase workers’ comp insurance. If a company does not have any employees, then it may be exempt from this rule. It is important to note that the laws on workers’ comp still vary by state, and this may not hold true in all circumstances.
Workers’ Comp Laws
There are only a few federal laws regarding the legislation of workers’ comp, so the laws on claims and insurance depend on the state in which the company is operating. States have various laws on how workers’ comp claims may be awarded, and some states may be more lenient than others on certain claims such as psychological conditions, or claims for chiropractic care. Some states require that all businesses have workers’ comp insurance, while others may not require businesses without employees to pay for the insurance.
No matter if the state statute requires companies to have this insurance, a company may still be liable in civil court if an employee is injured on the job. Most small businesses take the extra step in securing their protection against any personal injury lawsuits by getting reliable workers’ comp insurance.
Consulting With An Attorney
If you are a small business and have questions regarding workers’ compensation, or need help purchasing insurance in your state, it is advised to consult with a workers’ compensation attorney. An attorney experienced in workers’ compensation cases will advise you on what insurance will best fit the needs of your company, and will help answer any questions you may have on the subject. Alternatively, employees seeking workers’ compensation due to the intentional harm or negligent acts of an employer should contact an attorney as well. Employees may also have rights to file a lawsuit against their employer if denied the benefits of workers’ compensation. Do not hesitate to contact workers compensation lawyer Memphis TN in the event you have any personal questions.
Thank you to Darrell Castle and Associates, PLLC for providing the insight and knowledge on workers compensation insurance.