As business owners, we’re always looking for ways to cut costs, save money and improve ROI. There is one area you should never cut a corner on and that’s workers compensation insurance.
We understand that you may feel as if it’s unnecessary or just not important. Maybe no one has ever been injured or suffered from a serious work related accident. But laws are laws. We carry car insurance even though we don’t plan on getting into an accident. It’s the law and there are repercussions if we don’t follow the law. Business owners that decide not to carry workers comp insurance will risk fines, or even as severe a punishment as jail time (depending on your state).
What if the employer doesn’t carry workers comp when an employee is injured?
The employee will still receive workers compensation insurance directly from the employer, even if the employer does not carry workers comp insurance. To make matters worse the injured employee can also sue the employer in civil court.
What if the employer doesn’t have the funds to cover the workers comp claim?
In a situation where the employer does not have the funds available to cover the claim, the Uninsured Employers Benefit Trust Fund (UEBTF), a California State agency, will pay for the workers comp benefits.
If an employee is injured, they will have to make a request to the UEBTF to pay for the benefits if the employer is unable to. Here is a list of what must be sent to the UEBTF:
- Special Notice of Lawsuit to notify the employer
- All medical reports that document the work related injury
- All medical bills related to the work related injury
- Show proof of employment ie; pay stubs (within the dates of the injury)
- Petition to Join Party Defendant UEBTF
If the employee wants to file a civil lawsuit, he / she must prove that their employer didn’t have workers’ comp at the time they were injured. The employer will have to prove that the injury was not at work to avoid paying. The employee will have 3 years from the date of the injury to file their claim, due to statute of limitations. If the employee wins a civil lawsuit against the employer, the employee will have to pay all the money back to the UEBTF for any benefits they were paid in the workers’ comp case.
Please keep in mind, as a business owner you can be fined & thrown in jail for not having workers comp insurance.
If you need workers compensation insurance, call us today. Our agents would love to get you the coverage you need.