How To Limit Liability with Workers' Compensation Insurance

If one of your company's employees is injured, disabled or even killed due to an on-site accident while on the job, you could face financial ruin unless your liability has been protected by having a current workers' compensation insurance policy in force.

The purpose of worker's compensation insurance is to limit your company's liability when it comes to employees who suffer injuries, disabilities or even death while in your employment.  Most states require that any business hiring employees  have workers' compensation insurance in order to protect both the business owner and the employee should an accident happen on the job that results in unforeseen medical expenses, long-term disability or even the loss of life, resulting in subsequent lawsuits against the business.

Many businesses seek competing quotes for their workers' compensation insurance policy at least once a year in order to get the best deal on this most necessary of business expenses.  Workers' compensation insurance rates and benefits are based upon a number of factors, including the amount of a business' payroll, their number of employees, the location and physical size of their business, the type of business operation being pursued, as well as their history of carrying adequate workers' compensation insurance policies.

Before agreeing to any workers' compensation insurance policy, you should double-check with your state government offices regarding the minimal amount of workers' compensation insurance your business is required to carry by law.  Not having sufficient coverage and not finding out that your coverage is insufficient can prove just as financially and legally damaging as not carrying any workers' compensation insurance at all.

In an effort to economize or save a few dollars, it's never a good idea to contract with an unfamiliar or disreputable company just in order to carry the required insurance.  Always deal with a reputable insurance firm that specializes in workers' compensation insurance and can prove a stellar track record when it comes to paying out on claims.  If an insurance company seems to be offering you a suspiciously cheap rate, be wary that anything that looks too good to be true very often is too good to be true.  Your business must not only have a viable policy in force at all times, it should be with an underwriter who will come through for you and not jeopardize your liability in the event an employee is involved in an on-site accident.

It is a wise idea to assign someone in your company to regularly check that your workers' compensation insurance policy meets at least the minimum standards required by your state, in addition to paying attention to any changes in the law requiring workers' compensation insurance.  Keep accurate records about all insurance payments and be familiar with the terms of your current policy.  State governments often conduct surprise audits of businesses in order to discover those operating either without workers' compensation insurance or with a policy featuring inadequate coverage.


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