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Workers' Compensation for Business Owners

Most states require business owners to have workers’ compensation insurance for their employees. Workers’ compensation protect your employees in the event that they get injured or become ill, it also protects employers from lawsuits due to negligence. If you have one or more employees either on a full or part time basis you must have workers’ compensation insurance for them.

Employees are defined as a person who you have control over when and how the work is done. As well you pay according to a schedule rather than at the end of a project. Often the business owner supplies the equipment to the employees whereas an independent contractor will have to supply their own tools and decide when and how to complete the work.

If you use independent contractors you are not required by law to have workers’ compensation insurance for them but you must have it in writing that you are not responsible. Your contractors who have one or more employees must have workers’ compensation insurance, check for their certificate of workers’ compensation insurance to verify that they are covered for the full length of the project.

The premiums are priced by region as well as the class of employees you have, worker’s that are at a higher rate of injury will cost more in premiums whereas worker’s that are at a lower rate of injury such as secretaries will cost less in premiums. Claims history will also be taken into account when pricing your policy. If you have had a lot of claims and therefore many accidents then you premiums will be higher. You can be deemed too high a risk for too many claims and will not be able to get private insurance and will be forced to get state insurance.

Check your state requirement, not all states have the same regulations for workers’ compensation insurance. While workers’ compensation insurance will cover your employees make sure you have other insurance to cover yourself and any partners.