WEDNESDAY, FEBRUARY 26, 2020
What can happen to you and your business if you don't have workers compensation insurance? The short answer is — if you're not in a state that doesn't require it — you're going to be paying some substantial fines for neglecting to cover your employees.
If you find some workaround — such as paying employees under the table or treating freelancers as fulltime staff — you might still wind up paying fines. You could also be audited by the IRS and possibly even face criminal charges.
If you have a small staff, and you are legally allowed to go without workers compensation coverage in your state, then doing so is at your discretion. In this case, we're not talking about fines and audits, but rather the risk you're taking on by going without workers compensation insurance. So, what can happen in this scenario?
Lawsuits
If one of your employees is injured on the job and you don't have workers compensation insurance, one of the first things to expect is that they're likely going to want to press charges against you. They’re also likely going to find a lot of lawyers willing to take the case pro bono.
In these instances, the best that you can hope for is that your lawyers can prove that your employee was not injured in the course of their work duties, but rather due to their own negligence or disregarding your company's safety guidelines. This is sort of a win-lose situation. You can avoid paying for your employee's expenses, but you may have to pay substantial court fees — typically more than you would have paid to buy workers compensation insurance. Plus, a highly publicized lawsuit can be disastrous for a small business. And if your employee wins the case, the costs can be astronomical.
Best Case Scenario
In the very best possible outcome of an employee being injured without workers compensation to protect them, they don't sue you. But you're still out a valued employee, and it can happen again. So, you might not be so lucky next time.
No matter where you work, or what line of business you're in, accidents happen. Workers compensation insurance means that you — and your employees — are protected when they do.
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