While running a small business is exciting, it comes with its fair share of challenges. One such challenge includes the accidents and injuries employees tend to face while carrying out high-risk tasks or in hazardous environments. If not addressed promptly, such incidents can have negative repercussions on the lives of workers and their dependents and pose various problems for you as the business owner. Workmen compensation insurance is a type of employee insurance that provides coverage to those who suffer from work-related injuries, illnesses or even death while performing their job duties.
In this blog, let’s look at some of the main reasons to get workmen compensation insurance plan:
8 reasons for small business owners to have workmen compensation insurance
Even if you have taken all the necessary steps to adhere to the latest safety standards, it can be tricky to prevent accidents or injuries completely in any heavy industry. Such scenarios can range from minor to severe. Luckily, employee insurance offers the following advantages:
- Legal protection: You receive protection against legal liabilities under the Employee Compensation Act 1923, the Fatal Accident Act 1955 and Common Law, helping you avoid fines and penalties from regulatory authorities. As a small business, it’s crucial to prevent lawsuits from injured employees or their families, as these can lead to costly legal fees and potential damage to your reputation and industry credibility.
- Financial coverage: Paying for the treatment of an injured worker or compensating them for income loss can turn out to be a sudden and significant financial burden for a small business. However, workmen compensation insurance can eliminate that worry by covering medical expenses and providing monetary benefits in case of disability (temporary or permanent) or death of the employee.
- Extra protection: Employee compensation insurance often comes with add-ons that cover occupational ailments, contractors, subcontractors, as well as their employees and expenses related to surgeries in case the injured worker is hospitalised for over 24 hours. Hence, you get extra legal and financial protection and those affected get better access to necessary solutions.
- Employee well-being and satisfaction: When injured workers receive the treatment they need without worrying about the associated expenses, they experience smoother recovery. Being compensated for wage loss also gives them mental peace and assurance to their family members.
- Business continuity: With workmen’s compensation insurance, you don’t have to stress about legal battles, penalties or unexpected out-of-pocket expenses. When workers recover fast with the right treatment, there are fewer absences, which translates to fewer operational interruptions and better business continuity.
- Profitability: Paying hefty sums of money for the treatment of injured employees, wage compensation or legal disputes can increase your overall costs and impact the profit margin. With insurance, you can maintain and improve your profitability, which is essential for a small business to survive and grow.
- Risk mitigation: By transferring the financial and legal risks associated with workplace injuries to the insurance provider, you can better focus on your company’s core operations. You can allocate more time and resources towards devising growth strategies, which is essential for a small business.
- Reputation management: Having employee insurance handy for workplace injuries and illnesses means you are a caring and ethical employer. It can help you earn the trust and confidence of existing workers and retain them more effectively. In other words, you will have a more positive and productive work environment.
How to choose the right workmen compensation insurance?
Here are a few things to keep in consideration when picking a workers’ compensation policy:
- Go for a reputed insurance provider with a strong track record of quick settlements and efficient customer support. Research multiple providers, compare their offerings and then make a decision.
- Make sure the coverage limit is adequate to meet your potential financial and legal obligations in case of workplace-related injuries and illnesses.
- Compare the cost of premiums across policies and providers and assess if it is affordable. Remember, don’t compromise on coverage.
- Find out if there is any room for customisation in the policy you prefer, as every business has distinct requirements. Consider the workforce demographics, risks and operations that are specific to your industry.
- When buying a policy, don’t just check inclusions. Go through exclusions and terms and conditions to ensure you will be sufficiently protected. Take time to understand your rights and duties as well as those of the insurers.
- Find out if filing a claim is simple and go through the steps involved. Understand how much time it might take and what documents will be required. Always check the provider’s claim settlement ratio.
Conclusion
As a small business owner, workmen compensation insurance can protect you against unexpected expenses related to workplace injuries, legal hassles, business interruptions, employee dissatisfaction and loss of reputation. Research and compare policies before zeroing in on an insurance provider to avail the best possible coverage at an affordable premium.