If you’re a small business owner with only a couple of employees, you may not think that carrying a workers’ compensation insurance policy is necessary. However, as long as you have at least one employee, Pennsylvania requires by law that you have a workers’ comp policy in place.
The laws on workers’ compensation vary by state, but this type of insurance has been required under Pennsylvania law for most business owners since 1915 when the Pennsylvania Workmen’s Compensation Act was enacted. This act protects employers as well as employees from the costs associated with medical treatment after a work-related injury or disease. Texas is the only state in the United States that does not require workers’ compensation by law.
There are, of course, some exemptions, but workers’ compensation is generally required by law for all small business owners that have at least one employee. If you’re thinking you’d prefer to opt out of purchasing this coverage, the fees you would incur from breaking the law far exceed any annual premium you’d be paying your insurance company. Furthermore, you would still be obligated to pay for any injured employees’ medical bills and lost wages.
What Does Workers’ Compensation Cover?
A workers’ compensation policy provides wage replacement and medical benefits to any employee who is injured on the job. In return for these benefits, the employee waives the right to sue you, the employer, for negligence in most cases. This policy will pay 100% of the employees’ medical costs for all work-related injuries.
If your employee gets seriously injured and is unable to return to work right away, a workers’ compensation policy will also pay for the employee’s lost wages while they are out on medical leave. The maximum return wage in Pennsylvania is currently set at $1,049 per week; this means that the injured employee can be paid up to 66% of their normal wage subject to a max amount of $1,049 each week.
If your small business has “sub-contractors” or 1099 employees, you may still need coverage. These subs can be considered employees, making you responsible for injuries that occur on the job. Your best bet is to talk to a Risk Averse agent about your specific situation to determine whether you need to carry a workers’ compensation policy.
How Much Does a Workers’ Compensation Policy Cost?
Your premium amount will vary depending on your payroll and the industry you’re in, but the amount you pay in premiums will be small compared to the amount that a trip to the hospital will cost; an ambulance ride alone can be expensive.
Since most small businesses are not sure exactly what their payroll is going to be for the year, your insurance provider will calculate an estimated premium based on your estimated payroll. When your policy expires, your insurance company will audit your payroll and you will receive a refund if your actual payroll was less than the estimated payroll. However, if actual payroll turns out to be more than estimated payroll, you would owe the insurance company money.
Risk Averse Insurance has been insuring Delco and the surrounding areas since 2015, providing expert service while offering affordable prices on workers’ compensation insurance. We want to partner with your small business and ensure that you’re getting the best possible coverage.
Call Risk Averse Insurance in Media, PA to discuss workers’ compensation coverage for your small business.
Risk Averse Insurance is an independent insurance agency in Delaware County that specializes in providing high-quality insurance products at an affordable price.