Why Workers’ Compensation Coverage Is Important To Ensure Government Compliance?

There are several myths and misinformation that are prevalent regarding workers’ compensation insurance. This is often the reason many small businesses avoid buying this coverage. Does my business need to buy this coverage? How many employees should I have in my business to buy this insurance? Should I buy this insurance if my employees aren’t involved in hazardous jobs? The fact is California Workers’ Compensation law makes it mandatory for employers to cover their employees with workers compensation insurance. And this is irrespective of the business size as a business has to purchase workers compensation insurance even if it employees only a single person or in other words you need to buy it as soon as they hire the first employee.

When businesses don’t comply with this they are inviting trouble if any employee files for compensation having suffered an injury or illness at the workplace. As workers’ compensation lawyer in Oakland would tell it safeguards the interest of the employers as much as it does for the employees. While different states have different laws as far as mandatory obligations for businesses to provide this safeguard to their employees irrespective of their size. Unlike some states that don’t require employers to offer this coverage in case they employ less than five employees it California the first employee is entitled to this benefit.

This brings us to the important question – why is worker’s compensation coverage important to ensure government compliance. Every 21^st century business should always focus on the welfare of its employees. A happy and content team is usually the one which is also productive. There are people who look at welfare along with their paycheck when it comes to choosing a new job. As we have already mentioned workers’ compensation coverage benefits both the workers as well as the employers. The insurance company takes care of all the costs in case of any injury or illness lawsuit filed by the worker against the employer while in case of the worker it covers the cost of medical care, wage losses and any other kind of compensation that they are entitled to in the event of an injury.

Protecting Business Against Lawsuits It goes without saying that United States is among the most litigant societies in the world. And as a business owner the last thing that you’d like to get involved is a lawsuit. You also need to strictly adhere to the laws as laid down by the state and it is your obligation to safeguard your workers in the event of illness or injury. Workplace injuries take place in the safest of working environments. While you may adhere to all the safety standards in your workplace there is still a possibility for one of your employees to suffer an injury or an illness.

By investing in workers’ compensation insurance you’d pass down the risk to your insurer. This ensures that an employee who has suffered injury or illness can’t hold you liable for additional claims or liability. You will buy yourself protection against lawsuits and the financial and productivity burden that they force upon you. It is better to be safe than sorry.

The Risk of Not Buying Workers’ Compensation Coverage Businesses that haven’t complied with the law have often paid dearly for this misadventure. In California not providing workers’ compensation coverage to employees is treated as a criminal offense. The CA Labor Code outlines this as a misdemeanor and the quantum of punishment is also steep as business owners can face imprisonment of up to one year and/or have to pay fines of $10,000 and above. Apart from this employers can also receive stop-work order that brings disrepute to the business apart from loss of revenue and clients.

To sum up workers’ compensation coverage though mandated by law in Oakland and other parts of California shouldn’t been seen from this perspective alone. It is one of the most important benefits that businesses can offer their employees thus keeping their morale high and also protecting themselves against potential lawsuits.

Summary – In this write-up we look at why workers’ compensation coverage is important for a business to ensure government compliance.