The history of workers’ compensation dates back to the late 19th century in Germany. Safety in many of the factories or plants was not optimal and insurance companies at the time saw the need to provide an employee, in health benefits and monthly monetary payments, in case they were weakened in any way while in employment. the job. It wasn’t long after, in the 1930s and 1940s, that this type of insurance became a mainstay in the United States.

Now it is common and even mandatory to have it if you own a business that employs a certain number of people.

So what exactly is this? Simply put, workers’ compensation is a type of insurance that reimburses an employee who has been injured on the job for medical costs and lost wages. When a business has this form of insurance, an injured worker loses their right to directly sue a business for negligent tort or repair.

Each state has its own laws regarding this type of insurance, but universally this provision provides two benefits. These are a) weekly check payments to make up for lost time and wages and b) reimbursement or payment of all past, present and future medical payments for the injury that occurred.

This type of insurance is extremely beneficial, especially for higher risk jobs like roofing or commercial fishing, but also extremely expensive. It is one of the biggest costs of doing business for many companies, both large and small. Premiums can be astronomical!

It is not based on a fixed monthly or annual fee like other forms of insurance, but varies based on the wages you pay in $ 100 increments.

The cost of maintaining workers’ compensation for a typical roofing business is $ 30 for every $ 100 of payroll paid. For example, let’s say a particular roofing company called “ABC Roofers” paid $ 10,000 in wages one month. That same month “ABC Roofers” would be on the hook for $ 3,000 for the workers’ compensation company. That is a lot of money to pay.

As long as you can pass those costs on to a general contractor or client, then it’s not a big deal. However, it becomes a problem when some companies do not have it and can charge much less. These businesses don’t last long because all it takes is one accident and they can be personally 100% liable or OSHA can find out and apply enough fines to effectively put them out of business. Meanwhile, they offered fewer jobs and undermined legitimate competition, causing a host of headaches.

Workers’ compensation is not cheap, but it is something that every business should have. It is not just the law, but it is a wise thing to do. Even if the type of work your employees do is relatively safe, you need workers’ compensation.

A worker can slip and fall into a puddle of water or ice and without this insurance, a good and experienced personal injury attorney can take him to the dry cleaner. A simple fall can steal your home, cars, personal property, and more if you don’t have workers’ compensation. It is not worth the risk.

Nobody likes to pay high costs, but it is one of those necessary evils that we have to deal with. It’s actually a great provision and one that is absolutely necessary, but thousands of phooey claims have driven prices disproportionately high. However, without it, workers could lose everything from an injury that takes weeks or months to heal, and companies would be 100% responsible for everything if negligence could be proven in court.