Workers’ Comp Insurance For Self-Employed
If you own your own business, worker’s compensation insurance should still be an important part of your business plan. Even if you have only a few employees, unexpected injuries can be at best inconvenient and at worst devastating to your employees. Most businesses in Iowa are required by law to have worker’s compensation insurance. If you don’t have worker’s compensation insurance you could be in violation of the law and in some cases held personally liable for the injuries of your employees.
How Does Worker’s Compensation Help Self Employed Businesses
In the early 20th century, some states in the United States began requiring that owners provide workers compensation benefits for their employees.
Before this, injured workers had to take legal action against their employers, resulting in an expensive and adversarial system. The system pitted employers against their most valuable asset, their employees, in court.
Everyone needed a compromise. Beginning in 1911, the formation of the framework for our workers’ compensation system was formed. Wisconsin was the first state to design a framework for a statutory workers compensation system under state law, and other states quickly followed. This was a no-fault system intended to make sure workers were fairly compensated in case of an illness or injury by the workplace.
This compensation system also created limits on the obligations of employers. Accidents can and do happen. This was a cap on the effect of workplace accidents so that the costs could be made more predictable and affordable.
The formation of the workers’ compensation system in the individual states is sometimes referred to as “The Grand Bargain” between employers and employees to try to create a better system to administer benefits for work injuries.
State Requirement For Sole Proprietors With One Or More Employees
In almost every state, workers’ comp insurance for sole proprietors with employees is a legal requirement. These rules vary from state to state. You can check with the Iowa Department of Labor of the Office of Workforce Development for the specific requirements in Iowa.
State Requirements For Sole Proprietors
What happens when you don’t have any employees? If you’re a sole proprietor with no employees, your state may not require you to have workers’ compensation insurance. However, having coverage for work injuries is still very important. If you are injured in the process of your job, as a sole proprietor, you will be responsible for medical bills and wage loss if you don’t have coverage of a workers’ compensation policy.
If the injury is severe and you are taken off work for a significant amount of time, workers’ compensation insurance will pay for your medical bills and for your time off work as well as any permanent physical damage from the injury.
Even for sole proprietors, workers’ compensation coverage gives a vital layer of protection against unexpected accidents.
Why Do You Need Workers’ Compensation Self-Employment Insurance
1. It Protects Employees
Workers’ compensation laws protect employees. If any staff member becomes ill or gets injured because they work for you, they are entitled to benefits. The insurer pays for expenses like medical bills and lost income. The employee may also be eligible for industrial disability benefits if they are unable to return to their job.
2. It Can Save Money
Workplace injuries can be expensive. In many cases, the employer and the employee do not want to engage in a long and expensive legal battle to determine benefits. No matter who is at fault, if an employee falls, becomes ill or gets hurt working for you, workers’ comp can compensate. In extreme cases that result in the loss of life, workers’ comp benefits provide death benefits for funeral expenses and compensation for the surviving family.
Whether you are a small business with a few employees or a sole proprietorship, having workers compensation even if you are self employed is a good idea and is in some cases a mandatory benefit that is required to be provided to your employees.
If you are a sole proprietor with a work injury or an employee that has been injured working for a small business and you have questions, call the experts at Platt Law Firm PC for a free consultation at 515-346-6659.