The safety of your employees is one of the most important responsibilities of your business, even for small business owners. Safe, happy employees keep morale high and productivity up. However, if one of your employees suffers an injury during work or due to a job-related issue, or suffers from an illness related to work, the law will hold you liable. The employee then has the option of pursuing compensation for his or her condition. Workers’ compensation is an insurance plan that covers the costs an employee may have because of a work-related injury or illness, such as medical expenses and potential lost wages.

Workers’ comp is one of the more essential insurance plans you should obtain for your small business. Injuries are costly and can greatly affect the finances and well being of your workplace. By having an established workers’ compensation plan, you can protect your business and your employees from multiple expenses and legal issues.

The following are some of the reasons why workers’ comp is an ideal insurance plan that ultimately benefits both business owners and their employees.

1. Following the Law

Workers’ compensation is a requirement in several states for any business. By having this insurance at hand, not only do you protect your establishment and your employees, but you are also following the law and avoiding additional trouble in case of an accident. Check the specific workers’ compensation laws for your state to make sure you follow all of the requirements.

2. Avoiding Legal Issues

If an employee suffers from a work-related injury or illness and you lack an appropriate plan to take care of him or her, you are in a vulnerable position for legal action. The employee has the right to sue you for negligence, and a court settlement would force you to pay damages directly. If you have workers’ compensation, the insurance takes care of the expenses, sparing you and the employee from the hassle of a legal proceeding.

3. Helping Your Employees

By providing employees with workers’ comp, you are ensuring that they recover from their conditions as soon as possible. This insurance plan not only covers immediate medical treatment but sometimes rehabilitation as well.The employee will not have to worry about expenses and lost wages, placing focus on a quick and healthy recovery. If the employee has dependents, many compensation plans also cover them.

4. Improving Employee Morale & Safety

Using this form of small business insurance to compensate your employees demonstrates that you care about your workforce’s well being and are willing to take responsibility for them. This step can improve morale and build a positive rapport with your employees. It can also inspire a conversation that leads to better safety practices and greater awareness of hazards in the workplace.

5. Keeping Your Employees

If the employee did not suffer life-altering injury, disability, or mortality, workers’ compensation allows you to slowly reintegrate the employee back to work – especially if you have a good relationship with said employee. The insurance plan provides enough money to allow for a complete recovery. You can also assign transitional or temporary work to a recovering employee, so you can keep your favorite employee and maintain productivity in your small business at the same time.