Workers’ compensation is best known for providing insurance coverage for workplace injuries, but it also provides business owners with some defense against lawsuits from injured employees.

Mandatory coverage for employers in most states, including Indiana and Michigan, workers’ comp coverage pays for employees’ medical bills, medication, and rehabilitation costs.

By providing a mandated remedy for workplace injuries, workers’ compensation provides a cost-effective way to protect workers, reduce costs for employers, and lower uncertainty for all.

Workers’ comp general benefits

  • Payment for injured employee’s medical treatment
  • Partial replacement of lost wages
  • Employer defense against lawsuits

Optional coverage includes financial assistance for family members and reimbursement for funeral expenses if an employee dies in a workplace accident.

Workers’ compensation requirements and premium costs vary by state and type of business. Some states, for instance, require workers’ comp coverage once a small business hires its first non-family member employee. Other states have a higher employee threshold, or base workers’ comp requirements on payroll size. Most states have strict penalties for failing to purchase workers’ compensation insurance.

Bottom Line

Since workers’ comp premiums are based on industry risk as well as expected payroll size, small businesses that operate in more than one state or use independent contractors should explore their insurance options carefully. An experienced agent or broker can help you arrange the most effective coverage for your needs. Please give us a call at 1st Source Insurance (574) 271-5200 if you have any questions or need help with your workers’ compensation insurance coverage.