For many small business owners, workers' compensation insurance is a tricky subject. It doesn't help that there are a lot of misconceptions around it too.
Unfortunately, not knowing the facts around workers' comp can get you in trouble. Ignoring coverage or thinking an accident can't happen where you work can end up costing your business a lot of money and impact the health and safety of your employees.
Don't let yourself get caught off guard.
Learn why some of the most common myths around workers' compensation insurance are wrong and get the facts you need to know to make the right decisions on workers' comp insurance.
Myth #1: People don't get injured in offices
When most people think about workplace injuries their mind usually goes to construction or industrial accidents. And while injuries are more likely to happen there, your standard office building is another place where lots of accidents happen too.
In fact, some of the most common workplace injuries are simple sprains and strains and cuts and punctures. These happen in offices all the time; tripping over an extension cord or cutting your hand while opening a box are everyday occurrences.
Simple injuries can pop up anywhere— and they do. That's why it's so critical to make sure your business and employees are covered.
Myth #2: I only have one employee
According to Colorado workers' compensation requirements, in most cases, your business must carry workers' comp insurance even if you have only one employee. The same is true if that employee is your family too.
The fact of the matter is, it only takes one employee getting injured at work to impact your business for thousands of dollars. So, it's far better to make sure you're both protected.
And those rules don't just extend to the office either. For example, if you employ a nanny full-time to watch your kids while you're at work, you need workers' comp insurance to cover them too.
Myth #3: I only work with independent contractors
A lot of small business owners work with contractors, so they think they are in the clear when it comes to workers' comp. Colorado workers' comp law says that independent contractors must have their own insurance. However, it's up to you to confirm anyone you hire for contract work meets those regulations and has a certificate of insurance, otherwise you can end up responsible.
It's also important to know there are many types of contractors and each has the potential to impact your workers' comp insurance policy.
So, it's critical to understand the difference between independent contractors, subcontractors and contract workers. Because in some of these cases, you will need to account for these people on your own workers' compensation insurance plan.
Myth #4: Workplace injuries are still cheaper than my premium
Cost is another factor that's often a big workers' comp insurance myth. A lot of small business owners will forgo insurance because they are under the impression that any workplace injury will cost less than their premium.
That's not the case.
We've found the average on-the-job accident claim paid out is $7,500. Employers with workers' comp insurance in place can often save 50% of those costs vs those paying out of pocket.
And, don't forget, in Colorado, your business can also get fined up to $500 a day for failure to cover your employees by law.
Myth #5: We're like a family here, no one would sue
Where a big company means hundreds or even thousands of people that are impossible to know, a small business often has a handful, making it a much more family style atmosphere.
The danger in that is getting lulled into a false sense of security. Even the safest offices can experience costly injuries. And an employee who gets injured and is not covered might have no other recourse but to sue you for damages, which can quickly turn into tens of thousands of dollars.
Ignore the myths and learn the facts
Want to learn more? Here are a few more posts where you can dive deeper into Colorado workers' comp:
- What business owners need to know about Colorado workers' comp insurance—This will cover the basics of everything you need to know about workers' compensation insurance in Colorado.
- How to reduce the most common workplace injuries—A safer office can dramatically reduce injuries and workers' comp claims.
- Hiring an independent contractor? See what you need to know—If you're planning on working with a contractor, read this first.
- What is workers' comp insurance fraud?—You might not want to think about fraud but it can happen anywhere, make sure you're prepared.
Once you get the facts, it's easy to see why workers' compensation insurance is so important for small business owners.
Don't let yourself get caught off guard.
Get in touch with Cake today, and you'll get a Colorado workers' comp quote online in just a few minutes.
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