This is a question that has been debated often in the Workers’ Compensation Insurance Industry. I think the best way to view this question is to break it down to an understandable level. Most Business owners’ biggest asset and achievement is their company. All of the blood, sweat, stress, and long hours that they have dedicated to this endeavor can be gone in a flash without insurance. A lot of the time it’s the cost of insurance that concerns owners. I never use it or I don’t need it is how business owner’s justify not carrying Workers’ Compensation Insurance Coverage. Why is it that we will insure our cars, home, and life but not our biggest asset? You may have the safest workplace in the world, but something could happen. That something could be just a fluke situation, but wouldn’t you rather have the protection of Insurance vs. the risk of covering out of pocket if something does happen. Below is an example for you to think about related to Workers’ Compensation Insurance:
Imagine you own a Law Firm. In your mind your exposure to workers’ compensation insurance claims is minimal at best. Driving is an exposure that you may not think of that does exist for you and your business. Even though it does not happen very often it does exist. This could be driving to a different law office to pick up papers or meet for a mediation. You could be meeting with a client at their home of out of town. You could just be going down to the courthouse to file paperwork or go to trial. What happens if you or your legal assistance gets in an accident and is hurt. You tend to think that since it was an auto accident it should fall under auto insurance. What you don’t realize is that this employee was doing something in the scope of work and this is viewed as a workers comp incident. What if that employee can’t work anymore and they hire a lawyer. You don’t have work comp coverage so you could be directly responsible for paying claims out of pocket. If you have workers compensation in place, which for a law office is very affordable, then you could file this claim and be covered. You worked many years building your practice so why not protect it instead of leaving all your hard work and client development exposed to changing dramatically or ending completely over an incident that you could have taken care of with insurance.
Another quick example is a company that has about 5 employees and only Office exposure. This business doesn’t offer health insurance or work comp. The business owner thinks the business only has office staff. What’s the worse thing that can happen? Well in this scenario, Employee A is getting a glass of water from the dispenser and some water spills onto the floor unnoticed by the employee. Employee B later gets up to go send a fax. On their way Employee B slips and falls straight back and breaks their arm. If there is no insurance in place, the business owner is going to have to pay for this out of pocket. This will take money from the profitability of the company. The Cost of medical care for Employee B was around $20,000. Now if the same Business Owner had Workers’ Compensation Insurance Coverage, that probably based on exposure would have cost around $1,000 for the year, they could have saved $19,000. That is real money that makes a huge difference to business owners of any size.
There are many other examples we could go over from contractors to home health care to restaurants. You as a business owner may not think of the risk, but someone in your same business has either felt the pain of not having coverage or the relief of knowing that insurance is protecting what they have spent years building. Don’t leave your most treasured asset exposed. Consider the long-term benefits of insurance. It’s not a matter of if it will happen. It’s a matter of when it will happen.