February 28, 2022 | 4-minute read (710 words)
Entrepreneurs are admired for their ability to be their own boss and define their own objectives. On the other hand, entrepreneurhood often entails becoming the boss of someone else, which means assuming a degree of responsibility for their well-being.
Since becoming an entrepreneur or business owner implies not only responsibility but also risk, certain types of insurance can be a lifesaver. Indeed, insurance is a godsend that helps safeguard the business when it comes to work-related illnesses and accidents, which sometimes involve a third party.
Most states mandate that businesses carry workers' compensation insurance, which covers workers who are injured while on the job. Typically, it covers their medical expenses, rehabilitation costs and lost income. The average annual workers' compensation premium for small company owners is about $450 per employee,c, payroll and business location.
Statistics on workplace injuries and the necessity for workers' compensation
So, how often is workplace injury? As per the U.S. Bureau of Labor Statistics, there were 2.7 million occupational injuries in 2020. This equates to 2.7 full-time employees for every 100 full-time employees, but this statistic excludes temporary workers as well as state and municipal government employees.
While the number of yearly work injuries is declining compared to past years, the risk of damage still exists. By getting workers' compensation insurance to offer a financial and medical safety net for employees, business owners can reduce their risk of being sued in the event of a work-related accident or death.
Coverage can also be extended to the business's owners and combined with a general liability insurance policy, which protects their assets and persons who aren't affiliated with the company, such as customers. Once these two forms of insurance are in place, a business owner is prepared to deal with a wide range of problems that may happen during routine operations.
Other work injury data from the BLS include:
12 days off the job: Workers who were injured on the job were, on average, out of work for 12 days among all private industry occupations, up from eight days in 2019. Unemployment insurance pays workers if they lose their job, while business interruption insurance reimburses owners if their business is disrupted due to an employee accident or other reason.
Workplace fatalities: The Bureau of Labor Statistics reported a 10.7% decrease in workplace deaths in 2020 compared to 2019, but one worker died every 111 minutes due to a work-related injury during the year. Some 37.3% of these fatalities were transportation related, which points to the need for firms to secure commercial auto insurance that covers the company vehicle and employees. If someone is injured while using the car for business purposes, coverage applies.
Overexertion and physiological responses: Although transportation accidents account for the bulk of workplace deaths, overexertion and body reaction/physical response were the top causes of injuries resulting from most days away from work.
Apart from the forms of company insurance mentioned above, there are a few others to consider:
Business owner's policy – A comprehensive package that includes multiple policies, designed specifically for business owners.
Property insurance – Property insurance provides protection against harm and loss to physical and intangible, moveable and immovable assets.
Cyber liability – Cyber liability insurance is becoming increasingly significant as more work is done online that includes sensitive data. Due to your company's reliance on the internet, it is inherently vulnerable to cybercrime, and this sort of insurance provides protection.
Product liability insurance – Such policies are intended for enterprises that manufacture and sell items to consumers. Product liability insurance protects you from responsibility and pays the medical costs of impacted consumers in the unlikely event of a product failure.
Home-based business insurance – This type of insurance is becoming increasingly popular as more entrepreneurs operate from home. Under such policies, your house is considered to be both a business and a dwelling, and it provides coverage in the case of an accident.
Workplace insurance, including workers' compensation, is essential for business owners. Keep in mind Benjamin Franklin’s famous quip: “An ounce of prevention is worth a pound of cure.” When it comes to coverage for your business, seek the advice of a professional who is experienced with the numerous subtleties of various forms of business insurance.