Separating Fact From Fiction: 3 Common Workers' Compensation Myths Dispelled

Law Blog

As a business owner your primary concern is generating profits. If you live in a state where workers' compensation insurance is not required, it may seem beneficial to forego investing in a workers' compensation fund in order to cut back on costs. Unfortunately, this is just one myth surrounding workers' compensation that business owners are faced with.

Learning to separate fact from fiction when it comes to workers' compensation insurance will help you better protect your business in the future. Here are 3 common worker's compensation myths you may believe to be true.

1. Businesses with only part-time employees do not need workers' compensation insurance.

If you only employ part-time laborers, you may think you are off the hook when it comes to providing workers' compensation benefits, but this is simply not true. In fact, smaller businesses are among the most reliant on the protection workers' compensation insurance can provide, whether they realize it or not.

When a workers' compensation claim is filed by an employee, the business owner could be forced to pay out weekly benefits amounting to 60% of the employee's pre-injury wage. Small companies don't have the ability to absorb these additional costs, so access to a workers' compensation plan could be a life saver.

2. Businesses that employ only family members or close friends are immune to workers' compensation claims.

While no one wants to think about their close friend or family member suing them for access to workers' compensation benefits, the fact of the matter is that whenever you employ someone, your business becomes liable for potential injuries that might occur on the job.

With the cost of the average claim amounting to $65,000 in 2010, even family-run businesses should recognize the importance of investing in workers' compensation insurance to protect against financial hardship in the event a claim is filed against them.

3. Only businesses that engage in high-risk activities need workers' compensation insurance.

Everyone knows that working on a construction site or in a manufacturing plant can be dangerous, so business owners working outside these high-rise industries can often feel as though they don't need to invest in workers' compensation insurance. The fact of the matter is that there is no guarantee that any workplace can be 100% injury-free. Injuries covered by workers' compensation can happen in any work environment. These injuries even include mental injuries like anxiety or depression.

To ensure that your business is protected against the financial burden associated with a workers' compensation claim, invest in an insurance policy, no matter what type of environment your employees operate in.

Being able to dispel some of the myths that surround workers' compensation claims will allow you to better protect yourself against the financial ramifications that come from being improperly insured, should a claim is filed against your business in the future. Visit a site like for more information.


18 November 2014