For most businesses, investments are made with an eye on generating results you can see. A business might launch an advertising campaign and then track the new sales made online. Or they might start a new hiring initiative for their sales department and hope their revenues grow.
It can be a little trickier to invest in something you often can’t see – or invest money so that something doesn’t happen. But that’s exactly what happens in the case of workers’ compensation insurance: businesses invest money in order to protect themselves from potential disaster. Depending on the potential for injury in your business, purchasing the right worker’s compensation package might be the best decision you’ve ever made.
How Workers’ Compensation is Enforced
Across the country, of course, it’s legally required to purchase worker’s compensation insurance. The variable that’s left to the employer is what kind of insurance will be purchased. Businesses are free to choose their own vendors, their own packages, etc. In some states like Nevada, this process is highly privatized with minimal investment or regulation from the state.
This means that much of the quality of workers’ compensation will be both up to you and the type of business you run. Any business with heavy industrial equipment, of course, will be at substantially higher risk for serious worker injury and the compensation packages often reflect this fact. Traditional office-setting businesses will still be required to provide coverage – as injury is still possible – but in all likelihood their insurance will cost less.
Workers’ compensation is therefore enforced by a hybrid system: government regulation and access to private markets. This allows each business some leeway – but not too much – in determining how to best go about signing up for workers’ compensation insurance.
How Does Workers’ Comp Save Your Business?
Preventing a disastrous injury is crucial, but if one such injury occurs, preventing a disastrous expense should be the priority – both for the employee and the employer. There are generally two ways that workers’ compensation insurance prevents this from happening.
First, the obvious: worker’s compensation that is handled largely by a third party means that a lot of money can be paid to an employee without making a major dent in the company’s bottom line. Some companies, of course, are larger than others and will have more money with which to pay these bills – but these larger companies also have more employees to take care of. Every company has to worry about workers’ compensation at some point. Having insurance pay for much of the damage is essential to staying afloat.
Second, the presence of strong workers’ compensation insurance minimizes the risk that the employee will feel unfairly treated and therefore file a lawsuit. In the 19th century, lawsuits like this were a common way for an employee to get money while away from work; today, workers’ compensation insurance helps protect against the need for any lawsuit. After all, how strong a case can an employee have against an employer if the employer has been subscribed to quality workers’ compensation insurance for years?
If no disastrous injury occurs, of course, then neither of these two scenarios take place, which brings us back to the original point: investment in good workers’ compensation insurance is a protective investment rather than a growth investment. A good businessman should be able to see how both investments can be necessary in order to continue to grow.
Staving Off Disaster
Most businesses don’t think about injuries causing the ultimate downfall of their company. But start-ups and low-employee businesses do have to think about staving off disaster by purchasing quality insurance whenever they can. When a business is growing but still fragile, it can be toppled by any one event that ultimately costs a great expense to that company. Luckily, staving off disaster goes hand-in-hand with protecting employees.
It’s easy to look at workers’ compensation from a business perspective, after all. But from an employee’s perspective, workers’ compensation staves off disaster in just about every area of their life. An injury in the workplace doesn’t only affect the employee’s health, but their source of wealth: their job. It can also be a strain on relationships at home.
Many good companies care about providing good lives for their employees – or at least good professional lives. Purchasing quality workers’ compensation insurance is one of the cornerstones for ensuring that this can happen even in the face of an unexpected accident or injury. And if it saves the business, it protects every other employee’s future, too.