Get Insurance: Business and Workers’ Compensation

Part 3 in an eight-part series on Becoming an Employer.

 Part 1: Becoming an Employer
 Part 2: Apply for an Employer Identification Number (EIN)
 Part 3: Get Insurance: Business and Workers’ Compensation
 Part 4: Choose How to Handle Your Payroll
 Part 5: Start Hiring Employees
 Part 6: Complete Required Paperwork for New Hire
 Part 7: Make Payroll Tax Deposits
 Part 8: File Quarterly and Annual Reports and Returns

workers compAccording to the Small Business Administration, businesses with employees are required to carry workers’ compensation insurance. Your state will determine the requirements; they may offer several options, including the state-run workers’ compensation program, a commercial carrier, or selfinsuring program. Find your state workers’ compensation offices on the Department of Labor website.

The cost for this insurance is based on several factors, including the amount of payroll in your company, your SIC industry classification, and your experience rating. Your state workers’ compensation commission may assign you a starting rate based on your industry code.

Your state may offer a discount plan for businesses that enroll in certain safety programs. You may also find savings by enrolling in a group rating plan that includes similar businesses.

As the business owner, you may not be automatically covered by workers’ compensation unless you add yourself to the payroll as an employee and report your payroll dollars when calculating your workers’ compensation premium. It’s important to research this and make sure all of your employees are covered from day one.

Make sure that your business is properly covered by business insurance. Typical kinds of business insurance include a business auto policy and liability insurance. For more information, visit the Small Business Administration website.

Required Postings
Federal and state laws require certain posters for your workplace. These posters inform employees of their rights under employment laws such as the Fair Labor Standards Act, Equal Employment Opportunity, Job Safety and Health Protection, and the Family and Medical Leave Act, among others. You will also need to post your certificate of workers’ compensation coverage. The Small Business Association maintains a list of required posters.

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