Do You Need Workers Compensation Insurance Coverage?

Did you know that workers compensation insurance coverage not only protects your company from the potential of financial loss, it’s also required by law in the Commonwealth of Massachusetts if you have any employees? That means if you own a business the only employs one part time worker you need to carry workers compensation insurance coverage. In essence, it guarantees that any of your injured employees receive both lost wages and the medical care they need regardless of fault if injured on the job.

On the other hand, workers compensation insurance coverage protects the business owners from expensive employee based lawsuits if a worker is injured while working for or at your business.  It’s important for business owners to understand when and why you need to purchase workers compensation insurance coverage. As for the when, the answer is simple. You need to purchase workers compensation insurance coverage as soon as you hire your first employee. It’s the law.

A great deal of small business owners with few employees simply don’t realize that failure to comply with the Commonwealth of Massachusetts workers compensation laws may result in both civil penalties and criminal charges. It’s also incredibly important to put a policy in place in order to protect yourself and your business from liability issues that stem from employee injuries. If you are a sole proprietor who is self-employed and don’t have any employees you’re technically not required to have workers compensation insurance coverage.

That being stated, many businesses do require that independent contractors carry their own workers compensation insurance coverage in order to reduce their own liability. For example, if you’re a carpenter who works as an independent contractor and a general contractor hires you for a project, the general contractor may very well require you to carry your own workers compensation insurance coverage. Even if it’s not required, carrying workers compensation insurance coverage for your one-person business is still a smart idea.

For example, the policy will cover your lost wages and medical bills if you’re injured while working for yourself. If you are hiring independent contractors in the Commonwealth of Massachusetts they are technically considered employees for tax purposes. In essence, you will be required to provide those independent contractors with workers compensation insurance coverage. However, if the independent contractors that you hire meet all three of the following criteria, you don’t not to provide them with coverage.

First and foremost, you must prove that they do not work under your direct supervision or control. You must also establish that they perform work that is outside the normal realm of your business. Last but certainly not least, you must document that they have their own independent trade or business performing the same work that you contracted them to perform.

If you own a business that employs workers in the Commonwealth of Massachusetts you need to ensure that you have the proper workers compensation insurance coverage in place. Please consult with a professional insurance agent that can answer your questions about all insurance related topics. It is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options.

We look forward to helping you with all of your personal and or business related insurance needs now and in the future.

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