Last week, I was talking to a restaurant owner and he mentioned he had a problem with an employee who got injured on the job. After the injury, the employee went to the hospital; soon thereafter the hospital staff was asking about workers’ compensation insurance. The small business owner did not have insurance. Needless to say he got a lot of grief!
What is workers’ compensation? This is a state-mandated insurance program that provides wage replacement and medical benefits to employees injured in the course of employment. In general, an employee with a work-related illness or injury can get workers’ compensation benefits regardless of who was at fault. In exchange for these guaranteed benefits, employees usually do not have the right to sue the employer in court for damages for those injuries.
Do I need to have workers’ compensation insurance? California law requires all employers to have workers’ compensation insurance, even if they have just one employee! Make sure you shop around for an insurance carrier that best meets your needs. Cost is one consideration, but other factors include services provided, ease of access to claims adjusters and the doctors in the network.
What happens if I do not have workers’ compensation insurance? Failing to have workers’ compensation insurance is a criminal offense; so, be careful! The employees cannot pay or offset the cost of the policy. This insurance benefits cover all workers, including part time employees. Also, it is illegal to punish or fire an employee for filing a workers’ compensation claim. In California all employers are required to purchase workers’ compensation insurance policy from a licensed insurer.
Small business owner, make sure you have your workers’ compensation insurance policy up to date, do not let it lapse! Remember that this state mandated insurance program that provides the employees with wage replacement and medical benefits in exchange for mandatory relinquishment of the employee’s right to sue their employer for negligence.