Congratulations! Your small business has finally taken off and you are ready to hire your first employee. Knowing that your business has grown to the point that you cannot handle everything on your own is exciting. Hiring employees is a thrill. Until the light of day hits and you realize the amount of responsibility you have taken on. The more prepared you are, the easier the transition from sole proprietor to employer will be.
One of the biggest topics that new employers ask about is workers’ compensation. For many, the cost of premiums is daunting. You are about to go from putting all of your money back into your business to shelling out money for insurance. Consider for a moment, though, that paying for workers’ compensation is protecting your business as much as it is protecting your employees. But how?
1. It’s the Law
You are legally required to carry workers’ compensation insurance for your employees. Many states put a minimum on the number of workers you must have before you are obligated to purchase insurance. In some states, the number of employees required is one.
If you say ‘no’ to workers’ compensation insurance, you may be in violation of the law.
The cost of workers’ compensation premiums can vary, but it averages about $2 for every $100 of payroll. Is your employee going to get injured? Maybe not. And the money you pay for premiums will disappear. That said, if your employee is injured, the amount you pay for premiums will pale in comparison to the amount that you will be paying out of your own pocket to cover that employee’s medical expenses.
If your employee is injured at work and you do not have insurance, you can expect a lawsuit. You will end up paying not only medical bills, but you may end up covering someone else’s legal costs as well. Tens of thousands of dollars is nothing to be flippant about. Few people just starting out in business can afford this kind of hit to their finances.
Saying ‘no’ to workers’ compensation insurance is rarely, if ever, a good idea. If it is the law in your state, you will have to purchase it. If you have questions as to what type of coverage you need, your insurance agent or business attorney can assist you.
If you need help filing workers’ comp in South Carolina, please give us a call. A member of our team will review the details of your case at no cost to you and provide you with options. Call now.