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Understanding Employee Benefits: Workers Compensation Insurance

Scott Bilker Scott Bilker is the founder of DebtSmart.com and author of the best-selling books, Talk Your Way Out of Credit Card DebtCredit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.

As soon as you decide to employ someone within your company, you are making a commitment to them to be the best employer that you can possibly be. Within that comes many responsibilities, including ensuring that you have the correct employee benefits in place. Let’s take a closer look at what workers compensation insurance might be.

What is Workers Compensation Insurance?

Workers compensation insurance is an important policy that you need to have on your side. As a business owner, you need to ensure that you have the right collection of insurance policies to keep you covered in any eventuality. As soon as you hire an employee, you should look at getting some workers compensation insurance.

This is a key policy that will help you cover the costs of compensation. There are several reasons why an employee might decide to make a claim against you, but the compensation that they could be awarded could potentially bankrupt you depending on how much they ask for. The right insurance policy could help you out more than you could imagine here, allowing you to avoid bankruptcy and focus on fighting the claim if needed.

Why Might a Worker Apply for Compensation?

Your workers might decide to approach you for a number of reasons if they choose to seek compensation. With the right workers comp insurance policy on your side, you will be able to meet their needs and give them the support they need.

One of the most common reasons why employees might apply for compensation is due to an accident in work. Though we have many procedures in place to try to prevent them from happening, there is still always the chance that one will indeed come to pass. They might also have to get compensation for medical bills or loss of earnings. You need to make sure that you are prepared to help them wherever you can as a business owner and their employer.

Can You Do Without This Policy?

It would not be wise to try to go into business without some form of workers compensation insurance on your side. In many places around the world, it is actually illegal to hire someone if you do not have this type of insurance, so make sure you check your local laws to see how you can be compliant.

No matter how successful your business might be, a lawsuit and a claim for compensation from an employee does carry the potential to bankrupt you. Policies such as this are designed to protect you.

This is going to be one of the key policies that you have on your side as a business owner. Take the time to find the right ones for you, and make sure they have a level of coverage that you are satisfied with. Don’t take the chance without it – it is a policy designed to protect both you as an owner and your employees. Make sure you have a good and comprehensive policy on your side as soon as possible.

This entry was posted in Earning Income, Financial Planning. Bookmark the permalink. Read more articles by Scott Bilker. (Also see articles by all authors and articles in all categories.)

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