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Below are a few things about small-business owners who need workers’ compensation insurance.

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The U.S. economy is an excellent place for small business owners. Small businesses accounted for 44% of U.S. economic activity in 2019. They employ almost every type of worker, from restaurant owners to those working in insurance and marketing and workers in construction, restaurants, media, and other industries. Although small businesses can be a lifeline to the economy, they can also come with high costs. As a small business owner, there are many costs to pay, from the initial investment to ongoing expenses. One of these large bills is workers’ compensation insurance.

Workers’ compensation insurance is a way to help employees cover injuries sustained on the job. It also protects the employer against being sued if the employee receives compensation. This coverage was required in the U.S. starting in 1911 with the Wisconsin Workmen’s Compensation Act. Before the act was passed, injured workers had to prove that their employer’s negligence caused their injury. This placed the burden on the employee, who then had to defend the claim. The Workmen’s Compensation Act established a “no-fault” system, which did not require injured workers to prove negligence by their employer to be eligible for benefits.

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Wisconsin was the only state to have such a system. Nine other states soon followed Wisconsin’s lead. Workers’ compensation programs were mandatory in all 50 states by 1937. This is still the case today. Although there are some exceptions, workers’ comp coverage is required for almost every type of Business in every state. These programs have been a massive benefit to both employers and employees over the past century.

Simply Business has compiled eight tips for small-business owners interested in workers’ compensation. However, these programs are not always straightforward. They can be confusing as the requirements and exclusions differ from one state to another and even from region to region. Please continue reading to learn how these programs work and what small businesses should know about them.

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