Do I need workers’ compensation insurance for my business?
The short answer to this question is “yes.” Workers compensation insurance is required by every state in the US except Texas1, where it is voluntary. However, even if insurance were not a legal requirement, every smart business owner should have it. That’s because, insured or not, a business is legally responsible for any on-the-job injury, including injuries that take place entering or leaving a job site.
According to the National Safety Council2, in 2011 the average cost of a disabling work injury was $49,000. In the event of a fatal work accident, the average cost was $1.3 million. Both of these figures include only costs related directly to the worker. Employer costs and damage to property are additional. These are averages, with some injuries costing more or less, depending on the type of business where the injury took place and the value of lost productivity due to a worker’s absence.
Now consider those costs in light of two facts: 1) In 2011, the average non-fatal work injury resulted in eight days away from work, and 2) Private employers reported three million non-fatal injuries in the US in 2013, which translates to about 3.4 non-fatal injuries per every 100 workers.3 Imagine the burden on an uninsured small business if it had to pay for even one injury that occurred on the job.
Each state, including Texas, has different workers’ compensation requirements4, so it is important to check the laws in your state to be sure you are in compliance. Some states define “workers” to include volunteers.5 Other states allow businesses of a certain size to be self-insured. There are also exemptions and requirements that vary from state to state.
Here at EMPLOYERS we know the state laws, and we know you’re busy. We offer small business owners a complimentary needs assessment – Price and Performance Review — where we analyze your business to determine the coverage that’s right for you. We focus on your workers’ compensation insurance so that you don’t have to. After all, you’ve got a business to run!
Resources on our Blog:
Information on Self Insured Groups (PDF)
1) Texas Department of Insurance http://www.tdi.texas.gov/wc/employer/, accessed November 18, 2013.
2) National Safety Council https://injuryfacts.nsc.org/all-injuries/costs/societal-costs/, accessed November 16, 2013.
3) US Department of Labor, Bureau of Labor Statistics http://www.bls.gov/iif/, accessed November 16, 2013.
4) National Federation of Independent Business http://www.nfib.com/legal-center/compliance-resource-center/compliance-resource-item/cmsid/57181, accessed November 15, 2013.
5) New York State Workers’ Compensation Board http://www.wcb.ny.gov/content/main/Employers/understandInsurance.jsp, accessed November 18, 2013.