What if one day your employee is seriously injured on the job or on the way to a job? What if you don't carry workers' compensation insurance? What if you don't have enough money to pay their emergency bills and their time off work? What if you are caught operating without workers' compensation insurance for your employees?
I've always said I'm a tough love kind of insurance guy. These question ARE meant to scare you because the answers ARE scary... With Halloween days away, I thought I would share some scary information with you on why you need workers' compensation insurance.
Let's start with the first "what if"... If you have even one part-time employee, you need to carry workers' compensation insurance. Workers' comp is primarily designed to pay for the medical expenses of on the job injuries and the income of the injured employee while they are out of work. Depending on your state, there are serious penalties for operating without workers' comp. If you don't have coverage, you would likely be required to pay for their injuries out of your pocket. If you can't afford to pay, you employee and/or their loved ones could sue you for damages and the added expenses. One of the first questions that the hospital will ask your employee is, "Did the injury occur at work?" They know that employers are required to pay for on the job injuries and it's usually the quickest way for them to be compensated.
So, what if you are caught without workers' compensation insurance? Failure to have workers' compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code specifies that it is a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both.California can also charge penalties of up to $100,000 against illegally uninsured employers. So if you think you can't afford a little extra premium per month, try and swallow those fees. Laws and penalties do vary by state, but amost all states require employers to carry workers' comp.
This is no trick or treat, please do yourself a favor and get protection for your business and your employees. If your still wondering if your contractors are employees and if you are required to cary workers' compensation, please read my other entry - What Does a Duck Have to Do With Food Trailer Insurance?. If you need a workers' compensation insurance quote or have any question about this or other food truck or trailer insurance issues, please contact us. Happy Halloween!