Workers Compensation Case Study

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In almost every state, having workers' compensation is mandatory for all for-profit businesses with very few exceptions. There are penalties for those who do not have the mandatory coverage for their employees. If you don't have employees, you're likely wondering if you're required to have coverage, or if it's a good idea to cover yourself as the owner of the company. If you're a sole proprietor and an independent contractor for another company, it can become even more confusing.

What Does it Cover?
Before getting into whether you should be covered as a business owner, it's best to learn what workers' compensation covers. When a worker is injured on the job or becomes ill because of the workplace environment, that worker is entitled to benefits that replace his or her wages, coverage for medical treatments and eventual vocational rehabilitation if required. …show more content…

Their tax status as a 1099 might not matter. This is also true for owners of a business who work for others as an independent contractor. For example, if you're a plumber with your own business, but you work for a builder on his job sites as a contractor, you might need to get your own coverage or be placed under the builder's coverage. It would depend on the state as well as the contract between you and the builder.

Small Business Owner
As a small business owner, you are required to have workers' compensation if you have a certain number of employees. In some states the amount of employees might be 1 or 4, and you'll have to check with the governing bodies like the Department of Labor in the state to find out if you need to have coverage for your employees. You can opt to have a good insurance coverage or put yourself on the workers' compensation plan. If you have to cover employees, it might save you only a minimal amount not to add yourself to the policy.

Sole

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