What Happens To Employers and Employees When There’s No Workers’ Comp?

Alex works in the office of a small startup. The company, which is comprised of three employees (including the owner), is trying to keep costs low during the first few years of operation. One afternoon at work, Alex was a box of inventory from the warehouse to the office when he tripped on a cord, fell on the ground and hit his head.

The business owner took Alex to the doctor right away, where he was diagnosed with a slight TBI. Alex was told to rest and take some time away from work. When Alex asked his boss if he was covered by Workers’ Compensation Insurance, his boss said that because they wanted to keep costs low, he opted out of the optional insurance.

Now, Alex is missing over a week’s worth of pay, and the business is struggling even more with one less employee.

Why Workers’ Compensation Insurance is a “Must”

Unless you work in a labor-intensive or high-risk industry, you probably don’t think much about workers’ Comp (and your boss might not either). Many people assume that workers’ comp is only designed to look out for employees and penalize the employer. While workers’ comp does protect the employee, it also benefits the employer.

When employees are injured at work, workers’ compensation insurance is designed to help them recover lost wages, reimbursement for medical treatment, and other benefits related to their on-the-job industry.

Workers’ comp can help an employer save money in the long run by paying for the insurance rather than out-of-pocket costs related to a work-related injury. In many cases, workers’ compensation insurance can keep employers from being sued by their employees, regarding the workplace injury.

What Happen If There Is No Workers’ Comp?

Workers’ Compensation Insurance in North Carolina is different from any other state, so whether you’re a business owner or an employee, it’s a good idea to be familiar with the laws in your state. If you’re an employer and you live in a state where purchasing workers’ comp is optional, you should strongly consider getting the insurance.

Employers who have a low-risk business or a small number of employees are often tempted to opt out of workers’ comp or will sign up later. One trip and fall incident can hurt a valuable employee and not only keep them from coming to work, but can also affect the productivity of your business.

Employers who don’t have workers’ comp are putting themselves at risk for not only lost profits due to employee loss but may be at high risk of being sued by the injured employee. If you don’t think that workers’ comp insurance is an expensive “extra,” imagine trying to pay for legal fees and any fines or penalties.

If an employee is injured on the job and there is no workers’ comp insurance available, they may file for temporary disability benefits or file a personal injury claim, but like workers’ comp insurance rules are different for every state. Just because you’ve been injured on the job, it doesn’t mean you’ll receive the compensation that you deserve.

Workers’ compensation may be an “extra” that many companies opt out of, but if you’re an employer, it’s best to sign up right away rather than making it an afterthought.

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Melissa Thompson

Melissa is a mother of 2, lives in Utah, and writes for a multitude of sites. She is currently the EIC of HarcourtHealth.com and writes about health, wellness, and business topics.