Helping Small Businesses Understand Workers’ Compensation

Workers’ compensation, the insurance that safeguards employers from liability if employees are injured in the workplace, includes coverage for medical bills, lost wages, and ensures the employer will not be sued for injuries or illnesses related to the workplace. A great additional level of coverage for any employer, workers’ compensation underlines an employer’s role in taking responsibility for the safety of employees in the workplace.

Small business owners are not exempt from employee injuries or workplace safety, however. In fact, many states require that businesses carry workers’ compensation insurance for their employees. (Check your state’s workers’ compensation laws or contact us at Insured Solutions.) Regardless of the severity of the employee injury, workers’ compensation will ensure the injured employee, the employer, or a customer receives the care that is necessary to address their medical needs.

But not all small businesses understand the basics of workers’ compensation. Here’s what small business employers need to know:

  1. Workers’ compensation coverage is purchased separately from business insurance. We recommend choosing an insurer who is not only familiar with workers’ compensation claims in your state, but that is also well-versed in the coverage you need for your specific business.
  2. If your business requires employees to work with or around occupational hazards or illnesses related to your industry, it is a good idea to obtain coverage.
  3. Employee health insurance isn’t the same as workers’ compensation insurance. These are two separate and in fact very different policies.
  4. Physical injuries or illnesses obtained while on the job qualify for workers’ compensation coverage. However, if an employee was using a piece of equipment against manufacturer instructions or were acting dangerously even after receiving proper training, the claim could be denied.
  5. Independent contractors are typically ineligible for workers’ compensation coverage.
  6. Workers’ compensation typically does not cover injuries or illnesses obtained while not on the job, injuries that occurred while the employee was committing a crime or as a result of violating company policy, or self-inflicted injuries.


Protecting your employees, yourself, and your customers is an important aspect of making sure your business runs smoothly—especially for a small business owner. Workers’ compensation, in addition to employer liability, can help pay for legal fees, court costs, and settlements the employer may be required to pay in the event of a lawsuit. Learn how to best protect your business by contacting Insured Solutions.

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