Workers Compensation
You have employees? No workers Comp coverage? You are risking everything!
Tuesday, December 29th, 2009 | Workers Compensation | Comments Off
December 29, 2009 – In the current economic environment business owners try very hard to cut their overhead costs. There are many ways to do this: negotiate better rent for the business premises, lower the office supply expenses, cut back on business entertainment, reduce payroll by laying off employees, etc.
One effective cost reduction method is to look at the business insurance expenses and coverage. For example, insurance premium can be lowered if deductibles are raised or by shopping multiple carriers to find the most cost-effective policies. Businesses can also determine that they no longer need certain types of insurance. A fresh look each year at the insurance program can end up saving a significant amount of cost by identifying insurance that is no longer necessary.
However, if the business has employees, even one employee, the business must carry workers compensation insurance. Failing to have workers’ compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code makes it a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers.
If an employee gets hurt or sick because of work and the business does not have a valid workers compensation policy, the business is responsible for paying all bills related to the injury or illness. Having to pay the uninsured medical costs can be many times more expensive than the fines mentioned above.
You should be aware that if you are illegally uninsured and an employee gets sick or hurt because of work, that employee can file a civil action against you in addition to filing a workers’ compensation claim.
For the typical small business one uninsured work related injury can jeopardize its very survival.
How much would the typical business save by being illegally uninsured? Not too much. Often the premium expense for purchasing workers compensation insurance is much less than one would expect. We see minimum premiums in the $400 to $800 range depending on the type of business and number of employees. Is it worth to risk the survival of the business to save a few hundred or a few thousands of dollars? I would say no.
If you fail to pay required benefits you may also be contacted by the Uninsured Employers’ Benefit Trust Fund.
Contact the information and assistance officer at your local DWC office for further information.
Call Pacific Way at 909-599-1972 for free consultation and a no-obligation quote.
Do I need workers compensation insurance?
Monday, December 7th, 2009 | Workers Compensation | Comments Off
December 7, 2009 – Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.
To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they’re hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.
Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitiation services. It also provides death benefits to surviving spouses and dependents.
Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.
Workers compensation insurance must be bought as a separate policy. Although in-home business and businessowners policies (BOPs) are sold as package policies, they don’t include coverage for workers’ injuries.