Learn more about the pitfalls of cheap workman’s comp insurance.
Purchasing effective workman’s comp insurance means answering some important questions about your business and how it relates to this type of business insurance coverage.
As just one example, you may start to think about where your employees fall into workers’ comp insurance class codes. These codes define the type of work your staff performs and related risks they face, which plays a key role in answering another question: How is workman’s comp insurance calculated?
There are more basic (but no less important) questions to think about, too. You might also ask yourself:
Workman’s comp insurance functions by outsourcing the financial risks tied to a workplace injury or illness, and subsequent litigation, to an insurance company. By paying a predictable premium, your business won’t have to directly compensate injured or ill staff who file a workers’ compensation claim.
Finding workers’ compensation insurance is simple, too. When you work with an online workman’s comp insurance marketplace like InsurePro, you can complete the process entirely online and receive quotes from a variety of insurers.
When it comes to workers’ compensation insurance costs, the answers aren’t always so simple. Accounting for lost wages, medical care, and other needs covered by these policies is crucial. So is the cost of the coverage to your business, of course.
Only seeking out cheap workman’s comp insurance can leave your business without effective coverage. It’s far better to look for effective coverage options and then compare prices. Let’s take a closer look: Here are four reasons why cheap workman’s comp insurance doesn’t cut it.
While the specifics — relevant laws as well as fines, penalties, and other consequences — can vary by state, these reasons generally apply to a wide variety of businesses across the US.
Not every company must carry workers’ comp insurance, but a strong majority of businesses need to address this requirement.
A failure to have an active and sufficient policy can lead to regulatory and legal action. The specifics are different in each state.
As a general example, consider the legal penalties outlined by Pennsylvania law firm Wolf, Baldwin and Associates, P.C. for businesses that fail to meet these requirements in the Keystone State. Even a misdemeanor for an unintentional failure to have insurance could lead to a four-figure fine and jail time for a business owner.
A serious workplace injury or illness prevents your staff from returning to work and earning a living. When your business purchases workers’ comp insurance based only on the lowest possible cost, it may not effectively protect those employees.
Medical expenses, lost wages, and related issues can severely and negatively impact your injured and ill employees. For businesses that recognize the value their workers provide, effective coverage is crucial.
If your business doesn’t take its obligations seriously, an injured or ill worker could lead to a serious reputation issue.
An employee who suffers an injury while on the job and can’t secure the compensation owed to them — due to an ineffective policy — may start to discuss such a serious issue with their friends and family. It could gain a broader audience on social networks. Local media might pick up on the story and look deeper into your company.
And none of that is good for business.
If an employee decides to seek restitution through legal means due to an ineffective policy, your business faces some major expenses. That includes the costs of medical treatment and lost wages as well as legal fees and exposure to additional legal scrutiny.
A decision to try to cut corners to save money can ultimately have the opposite effect.
We don’t want you to think that workers’ compensation policies need to be costly to be effective.
The key point we’re making is that your coverage needs to be relevant and aligned with your business to be truly useful. Your coverage must take the size and nature of your business into account, as well as the duties of your employees. As long as that’s the case, it only makes sense to seek out a cost-effective policy.
InsurePro connects you with fast insurance quotes through a fully online process. You can compare prices and secure effective workers’ comp coverage in a single day.