One of the first things you’ll need to do when starting a small business is look into insurance. Without an insurance policy, your business won’t be protected from various risks that come with the territory. If you have employees, you’re going to need workers compensation insurance.Â
For electricians, in particular, business insurance should be a priority, as it helps mitigate risks related to your trade. You’ll need both general business insurance and workers' compensation insurance to protect your employees and your business. For more details on insurance coverage tailored to electricians, check out our Business Insurance for Electricians page.
Workers compensation insurance is what protects your employees, and you, while they’re on the job. In fact, in Arkansas, this type of insurance is legally required if you have 3 or more employees. If you’re feeling lost, don’t worry! The team at G&G Independent Insurance is here to talk about all things workers compensation insurance to help you get started.
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What is Workers Compensation Insurance in Arkansas?
To start, figuring out what types of insurance you need for a small business can be overwhelming. Workers compensation insurance, also known as workers comp, is specifically for protecting your employees, and you.Â
This insurance provides medical benefits to employees if they sustain an injury on the job. Along with medical benefits, workers compensation insurance provides:Â
- Reimbursement for lost wages
- Rehabilitation costsÂ
- Death benefitsÂ
- All medical expenses
Essentially, workers compensation is there just in case an employee gets hurt at work. If they have to miss work, the insurance policy will cover the lost wages while they recover. It will also cover all of the medical expenses associated with the injury. If you don’t have workers compensation insurance for your employees, you could end up paying for it out of pocket. Along with legal fees.Â
Workers compensation not only covers injuries, but illness as well. It’s important that all illness and injury are reported right away to have the best change of claims being approved.
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Why Do You Need Workers Compensation Insurance in Arkansas?
Typically, the State legally requires workers compensation insurance as soon as you hire your first employee. Again, it’s not just for the employees. Workers compensation insurance protects you and your business from financial loss and risk from injured workers.
If your employee falls and can’t work for three weeks while on the clock at your business, and you don’t have workers comp, you’re paying for that on your own. Also, the employees and their families could sue you, and you’ll be drowning in legal fees on top of medical and lost wage costs.Â
This is why most states legally require workers compensation insurance. That way, if an employee does get injured on the job, you can avoid that whole mess. Even if you’re running what you consider the safest business, such as a soft pillow shop, you should still have this type of insurance.
Who is Required to Carry Workers Compensation Insurance?
Simply put, anyone that is running a business should have workers compensation insurance. It’s going to vary state by state, but let’s look at Arkansas as an example.Â
According to the Arkansas Department of Labor and Licensing, most employers with three or more employees are legally required to have workers comp. Keep in mind that there are exceptions to that rule. If you have a business with less than three employees, you should still look into the workers compensation insurance laws before assuming you don’t need it.Â
How Does Workers Compensation Insurance Work in Arkansas?
Workers compensation insurance must be purchased by the employer. This goes for every type of business insurance. None of it can be paid for by the employees. It also cannot be deducted from their pay. The entirety of the policy should be paid for by the employer.Â
If and when you need to file a workers comp claim, the process can be complex. You can always reach out to your friendly G&G Insurance agent to answer any questions you may have!Â
Once an employee reports an injury to you, you must file the claim with your state Workers Compensation Board, or the insurance agency you purchased the policy from.Â
The benefits will depend on the type of injury. There are certain injuries that aren’t covered, including:Â
- Intentional injuriesÂ
- Injuries that happened while intoxicated
- Repetitive motion injuries
It’s ultimately up to the workers compensation insurance agency on what they will cover and what they won’t. You can consult with your insurance agent, and local laws to find out what exactly is covered.
Final Thoughts
To sum it up, workers' compensation insurance is essential for protecting both you and your business in Arkansas. Even if it's not legally required, having it in place can save you from costly medical bills and legal troubles in the event of an unexpected employee injury.
If you're looking to secure business insurance, including workers' compensation or commercial auto insurance, the team at G&G Independent Insurance is here to help. We’re happy to answer any questions and provide a competitive, personalized quote. Reach out to us today to get started!
