Do I Need to Provide Workers’ Comp Insurance as a Small Business Owner?

Do I Need to Provide Workers’ Comp Insurance as a Small Business Owner?

One of the first things a New York startup aiming to hire employees should take care of is setting up workers’ compensation in NY. This insurance pays an employee’s medical bills for injuries or illness that develops on the job. Here’s what you need to know about workers’ comp for small business owners.

Who Needs Workers’ Comp?

If your business hires one or more employees, you’ll need to buy workers’ comp to comply with New York state law. If you are a one-person sole proprietorship, you are exempted from this requirement.  There are other types of health plans available for entrepreneurs. It’s crucial to carry workers’ comp insurance because failure to do so in New York can result in substantial fines.

Small Businesses with Employees

Most small businesses should look into appropriate workers’ comp coverage in NY. The nature of the work and the workplace are key factors determining the type and amount of coverage you need. The coverage should reflect occupational risk. A mining job, for example, is much more dangerous than a desk job, which is why mining companies pay higher premiums.

Carrying the right policy for your employees sends a positive message to your team that your company cares about their well-being. The modern workplace is shaping up to be a challenge for many businesses to retain talent.

In order to maintain a stable workforce and avoid the costs of recruiting new employees, it’s essential for a business to provide good benefits. So, if the job is relatively safe, the risk of filing a claim is low. However, warehouse workers who do heavy lifting run greater risks, so they may have high expectations for quality insurance coverage.

Small Businesses Without Employees

If you are self-employed and do not hire part-time or full-time employees, you won’t need to invest in workers’ comp. In some cases, self-employed owners may have to buy this coverage if they regularly work with subcontractors or unpaid volunteers. You’ll need to discuss these issues with your insurer.

Be aware that the state treats subcontractors as employees. Other types of work positions that NY treats as employees include leased and borrowed workers. Day labor is also classified as an employee in the state.

How Does Workers’ Comp Work?

Understanding workers’ comp for small businesses is not very complex, but there are many variables that can make it seem difficult. As an employer, you need to purchase the plan for your employees and stay up to date on your bills.

When an employee gets injured or ill on the job, they are entitled to file a claim and receive a speedy reimbursement. This money pays for hospital visits and treatment. In the case of severe injury, the employee will not be able to work for a certain period. The insurer pays the employee for time away from work. The payment reflects a majority percentage of the worker’s regular salary or wage.

How to Get Workers’ Comp

Three options for securing insurance coverage exist for New York workers: private insurance, New York State Insurance Fund, and self-insurance. Companies typically buy plans from the private sector, but the state fund option appeals to small businesses looking for affordable solutions.

First, talk with an insurance agent who is familiar with your industry. Then find out the coverage options in which your enterprise qualifies. Contact us at 01 Insurance to learn more about how you can get the best deals for workers’ comp in NY.