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WHO NEEDS WORKERS COMPENSATION AND WHY?

To put in the simplest terms, if you have a business with employees you are required by law to have Worker’s Compensation insurance. Worker’s compensation is different from business liability insurance or professional liability insurance and is the kind of insurance that was devised as a statutory requirement for two principal purposes:

• It ensures that employees are compensated for injury sustained in the work place or in course of employment.
• It precludes the threat of litigation that was always a possibility for an employer whose employee sustained an injury at the work place and decided to sue. With the worker’s compensation insurance being in place, the kind of litigation where an employee could sue and an employer would counter his suit, claiming negligence on part of the employee is done away with.

So the whole rigmarole of employee being injured, employee suing employer, money and time and resources being wasted on protracted court proceedings is a thing of the past. With Worker’s Compensation, the employee simply submits a claim to the insurance company which is then processed and paid.

So is worker’s compensation only for businesses with employees? Well generally speaking, you do not have to have it when you are self employed, but in most states, the option of having this kind of business insurance is available. So even in the event that one is self employed, opting into this kind of insurance may be advisable.