Does your business require workers compensation insurance?
You will be quite surprised that worker’s compensation is a big deal for small business owners. There are not many insurances that are compulsory for businesses. Workers compensation, however, is compulsory if your business employs employees.
Workers compensation is a form of insurance payment to employees if they are injured at work or become sick due to their work. Payments can include wages when they are not fit for work, medical expenses relating to the work injury or lump sum payments for death or permanent impairment.
All employers must have a workers compensation policy. This also includes companies that only employ the sole director/employee. As a result, freelancers, contractors and locums who run a business through a company and employ themselves as an employee will be required to take up a workers compensation policy. Not to worry, its not an expensive policy and it does protect your business from any unforeseeable costs related to workplace injuries.
How do you get workers compensation insurance?
If you have owned a car before and taken up insurance for the car, its actually quite a similar process. However, before you contact an insurance broker or an insurance company, work out the following:
- The industry and business activity
- Number of workers
- Estimated wages/salary for the period of insurance
- Does your business employ contractors
Contact insurance companies and provide the above information about your business. They should be able to provide an on the spot policy and premium for your business. If you would like to shop around and negotiate your policy premium it may be a good idea to speak to an insurance broker and other insurance companies.
You should also request from your insurance company a certificate of currency. This document confirms that you have that insurance policy for that period. Its quite useful as when you do business many stakeholders such as clients, contractors or landlords will request for this.
Note, at the end of your policy your insurance company will contact you to provide the “actual” wages for the period of the insurance. You will then receive a refund or payable notice for the difference between the estimated calculation and the actual.
Check out our guide on 7 types of insurances for contractors.
Sounds pretty simple!
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