Choosing Excellent Insurance Coverage

Starting Your Own Business? How to Avoid Mistakes With Your Workers Compensation Insurance

If you're about to go into business for yourself, you have a lot of decisions to make. One of those decisions includes the type of insurance policies you need for your business. Having the right insurance coverage is one of the best ways to protect yourself from financial ruin. While you're shopping for insurance, don't forget about your workers' compensation coverage. Many small business owners forget about this specific type of insurance. But, now that you're going into business for yourself, you can't afford to forget about workers' compensation coverage, especially if you're going to be responsible for employees. Here are four steps that will help you avoid mistakes with your worker's compensation coverage. 

Choose a Separate Workers' Comp Policy

If you're going to sit down with an agent to discuss your insurance needs, make sure you get the right coverage for your business. You might think that your basic commercial liability insurance will protect you against work-related injuries. But, that's not the case. Commercial liability insurance does nothing to provide coverage for work-related injuries. For that, you need workers' compensation insurance. Your agent can help you add that coverage to your policy bundle. 

Identify Specific State Requirements

Now that you're going into business for yourself, it's important that you identify specific state requirements, especially where workers' compensation insurance is concerned. Each state has its own requirements for workers' compensation coverage. For instance, in California, business owners are required to carry workers' compensation insurance once they have at least one employee. Failing to maintain workers' compensation insurance could get you into serious trouble. If you're not sure about the requirements in your state, talk to your insurance agent. 

Understand the Policy Limits

When it comes to buying workers' compensation insurance for your small business, make sure you understand the policy limits. There are two different types of limits attached to your worker's compensation policy. The first is the coverage for your employees. The second is the coverage limits for your protection as the employer. You can't change the policy limits for your employee coverage. But, you can change the limits for your coverage. It's important to note that the employer coverage protects you against injury-related employee lawsuits. When buying your worker's compensation insurance, you want to make sure to include sufficient coverage for those types of lawsuits. 

Avoid Coverage Gaps

Finally, if you plan to open a small business, don't wait to buy your workers' compensation insurance. You want to have coverage in place before your employees start work. That way, you have workers' compensation protection from day one. 

For more information about workers' compensation insurance and your business, contact an insurance office like Quote Texas Insurance.