When it comes to Colorado workers' compensation insurance lots of small business owners have questions.
You might feel the same way.
As an essential part of your business, having workers' comp insurance makes sense. You know you need to have it. But after that things might feel fuzzy. With everything else that goes into running a small business, what workers' comp actually covers can get lost in the weeds.
The most important thing to know is this: workers' comp provides compensation for workplace injuries.
That's your starting point.
From there, the two biggest questions revolve around coverage. What's covered under workers' comp and what isn't.
We're going to break down the basics of workers' compensation coverage right here so you can understand both why you need it and how this type of insurance can protect you and your employees.
What's covered with workers' comp insurance?
Workplace injuries and illnesses cost employers billions of dollars each year. And for those businesses who don't have workers' compensation insurance, the costs are even higher.
So it's vital to know how you and your employees have protection under workers' comp. Here are few of the most common examples:
- Medical costs related to an on-the-job injury or illness: Sometimes accidents happen at work, and that doesn't just mean the office, an employee could get injured while traveling for business too. These injuries or related illnesses get covered even outside of the office if the injury happened in the scope of their job.
- A portion of lost wages: An employee missing work for an extended period can add up since Colorado law requires your business pay a portion of their wages. Workers' comp insurance helps defray some of the financial burdens on those lost wages. However, you'll also need to consider additional expenses not covered under workers' comp including the costs associated with searching, hiring and training a potential replacement employee. All that can add up.
- Related legal fees: It's not uncommon for an injured employee to try and sue the employer. A prolonged lawsuit or negotiations can cost end up costing tens of thousands of dollars in legal fees. With employer liability coverage, insurance can help cover settlements as well as court and attorney fees.
What isn't covered under workers' comp insurance?
Just as important as knowing what gets covered, you should also understand what isn't covered by workers' comp.
Here are a few examples:
- Medical costs for certain non-traditional employees, including interns or volunteers: Volunteers and interns typically don't perform the work a traditional employee would, thus they aren't typically covered. One exception might be if they are using special equipment or tools in the office that you provide, in that case, you want to check first.
- On-the-job injuries due to alcohol or illegal drugs: While many employers drug test, some don't, and that doesn't excuse employees from illegal drug or alcohol use though. If an employee unlawfully uses drugs, there may be implications to their benefits received in a claim. It's best to consult a lawyer for details on how drug laws on the state and federal level may impact recipient benefits.
Ready to get started?
Colorado law requires businesses that have employees to carry workers' comp insurance. So, if you have even one employee working in your office, you need to understand your options. This guide can help you start to determine if someone working for you qualifies as an employee and needs coverage.
Once you know you have employees, Cake can help. We can guide you through the process and find the best coverage for your needs. Contact Cake if you have any workers' comp questions, or get a quote in under 90 seconds if you're ready to get covered.