Worker’s compensation coverage for contractors

construction insurance

Construction is a high risk business for business owners and their employees. The risk of accidents and injuries is quite high in this line of work compared to many others. This is why it’s important for construction companies to have a plan to address the cost of the medical payments as well as lost wages in case  of an accident.

Worker’s compensation is the business first protection plan. If a claim is declined by the workers compensation policy, an employee could bring a lawsuit against the employer which could result in a long unpleasant legal battle.

To void this scenario and provide protection for both employers and employees, most states require that contractors who have employees carry workers’ comp insurance coverage. Failure to comply with the state’s requirement could result in fines and possibly loss of  business.

So let’s see how workers’ compensation provides protection for employees and employers.


Employee protection

Statistically speaking, most construction workers suffer from at least one work related injury during their career. Most injuries result from falls, falling objects and electrocutions.

Workers’ comp coverage will help pay for wages lost during recovery, medical expenses, disability expenses and funeral expenses in the event of a fatality.

Even if the incident was a result of the employee’s negligence, it is unlikely that a judge could rule for the benefit of the employer.

Business protection

The last point about employers being most likely found responsible even if the employee was at fault resulting in the accident is an important one to keep in mind. Besides the fact that workers’ compensation is required by most states, it is the business’s first line of defense to protect the business in case of an accident at the job.

Failure to carry workers compensation could not only result in legal penalties by the state but could also result in loss of business in the state pushing the business to bankruptcy in some case. Adding an accident to the mixture and the business could be liable for the medical expenses and wages lost to the employee. This is an incredible financial burden for any business that could easily be avoided by abiding with the law and getting a workers’ compensation policy in place.


You might also be interested in:

Health and Human Services Insurance and Risk Management