Workers’ Compensation Insurance for Small Business – FAQ

Workers’ Compensation Insurance for Small Business – FAQ

November 30, 2021By admin

What is Workers’ Compensation Insurance?

Workers’ compensation insurance covers job-related accidents, injuries, or illnesses. Required by many states in the U.S., workers’ comp insurance protects you and your employees. 

Is it Required for Massachusetts?

Yes, Massachusetts law requires all businesses to have workers’ comp insurance. Even if your business only has one part-time employee, they still need workers’ comp. 

Massachusetts is very strict regarding workers’ comp, so it’s important to make it a priority and take the law seriously. The only exceptions include the following:

  • Commission-based workers on a buy/sell basis. In this case, they’ll be required to confirm a contract specifying their detachment from employment under federal tax law. 
  • People involved with interstate commerce who are covered by federal law for workers’ comp. 
  • Domestic service workers who work less than 16 hours a week. 

Workers’ Compensation Insurance for Small Business – Why Do I Need it?

Yes, workers’ comp insurance is needed for small businesses; for one thing, it’s the law. For the state of Massachusetts, a small business owner needs to have workers’ comp by the time they hire their first team member. 

Refusal to comply could result in a fine of up to $1,500 and a year in prison. Even without penalties, it’s considered an ethical responsibility to keep your employees safe. Not only that, it improves your business’s reputation by covering any major accidents that occur on-site. 

Why is Workers’ Comp Important?

It keeps everyone safe, including your small business. With workers’ comp insurance, any medical expenses and/or partial lost wages are covered. Many policies also include coverage from employee lawsuits.

The biggest takeaway is that a major injury or illness could severely affect your business and happen at any time. With workers’ comp insurance, everyone is protected. 

How Does it Work? 

Workers ‘ comp covers medical care if an accident occurs on-site or an employee develops an illness attributed to your business. If an employee is recovering and unable to work, it provides disability benefits; this applies to both partial and total disability. 

Does it Protect You From Lawsuits?

It depends on the policy. If it includes employer’s liability insurance, this can help cover legal fees. If an employee comes forward with a lawsuit, the employer’s liability insurance can cover attorney costs, court fees, or settlements. Even so, the state of Massachusetts includes the exclusive remedy provision in most workers’ comp policies; this prevents an employee from suing their employee upon acceptance of workers’ comp benefits. 

Does it Cover Employees With COVID-19?

It depends on where it was contracted. Workers’ comp doesn’t cover injuries or illnesses outside of work. Even so, a healthcare worker who contracted COVID-19 would have a higher chance of being covered. 

What About Severe Accidents?

While we hope this never happens, a severe work-related incident leading to the passing of an employee would be covered by death benefits. These include coverage of funeral costs, weekly payments to cover the employee’s income, and burial costs. 

Brabo is one of the premier insurance solution providers and payroll companies for small businesses on the South Shore. We’re happy to answer all of your questions regarding workers’ comp insurance, mass payroll, multi-state payroll, and other services. 

Please reach out today!