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What you need to know about this important insurance policy
Workers' compensation provides financial assistance in the event of a work-related injury or illness. It's not a tax; it's as an insurance policy with an annual premium – and must be managed by a state-licensed insurance broker. In many states, household employers are required to carry a policy. In others, it's optional. However, we recommend that all household employers obtain a workers' comp policy. Here's why.
Families who don't have workers' compensation insurance coverage have significant exposure if there is ever a workplace injury because employers are generally liable for the amount of the workers' comp benefits – meaning they would have to come out of pocket for the employee's lost wages and medical expenses. A significant accident could be financially devastating. Here is a real-life case:
A nanny sustained a back injury in a car accident while grocery shopping for her employer. She was unable to work for 12 weeks and her surgery and rehab expenses totaled about $15,000. Based on her average weekly wage and the medical expenses, the workers' compensation benefits would have been approximately $18,000. However, because they didn't have a policy, the family was forced to pay those benefits.
In addition to financial liability, in states where workers' compensation is required, there are substantial fines for non-compliance. Finally, workers' compensation insurance provides legal protection because employees who accept benefits generally forfeit their right to sue the employer – regardless of fault.
Each state has different workers' compensation regulations. For the requirements in your state, click here.
The good news is, no matter where you live, we can help. As part of our setup process, we can guide you to a stand-alone workers' compensation policy offered by our exclusive partner. We do not upcharge or make any money on these policies. Our goal is simply to bring our clients a convenient, affordable solution to workers' compensation insurance.
Like any insurance, workers' compensation isn't needed very often. But when it is, it's worth its weight in gold.
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