Today’s cautionary tale comes by way of West Virginia, where the state and the West Virginia Commissioner are suing Superior Steam Cleaning and Sand Blasting Inc. and its owners for failing to maintain Workers’ Compensation Insurance.
According to The West Virginia Record, a legal journal, the suit wants the defendants to pay…
- $4,017.82 as a result of becoming uninsured in April 2013.
- $7,737.60 for a cancelled policy.
- $1,934 for additional fines accrued monthly.
The state wants the business to halt operations until the fines are paid in full and it can provide proof of coverage. The lawsuit also requests that the business not sell or transfer any property until its debts are squared away.
Let this story act as a PSA to your business: carry Workers’ Comp or suffer the costly consequences.
Why Workers’ Compensation Insurance Is Kind of a Big Deal
Unlike other commercial insurance policies, Workers’ Compensation Insurance is one of the few policies mandated by almost all states across all industries. It is a universal truth of the business world: if you have employees, chances are you need to carry this coverage.
Some state mandates kick in at certain employee thresholds. For instance, you need Workers’ Comp in Florida when you have four or more employees (so long as you work in a non-construction industry). Other states, such as California, require you to carry coverage as soon as you hire your first employee.
The consequence of noncompliance varies from state to state. For instance, you may…
- Be ordered to pay brutal fines, as the lawsuit in West Virginia demonstrates.
- Face felony charges (and their associated penalties).
- Go to jail (for serious offenses in some states).
- Have to pay to defend your business in court over noncompliance claims.
- Have to pay out of pocket for your work-injured employees’ medical bills.
Read more about the high cost of noncompliance in our post, “What Happens If I Don’t Have Workers’ Compensation Insurance?”
Workers’ Comp Crash Course: What WV Small-Business Owners Need to Know
West Virginia business owners, for the most part, are all required to carry Workers’ Comp Insurance. Agricultural businesses and casual employers may be exempt if they meet certain criteria. (You can read more about WV’s Workers’ Comp laws here. Not a West Virginia resident? Look up your state here: Workers’ Compensation Laws by State.)
Workman’s Comp covers claims involving employee work injuries and illnesses. It can pay for…
- Employee medical bills.
- Disability and funeral expenses.
- Liability expenses if your business is sued over the injury.
Say you run a small advertising firm. You may not think your employees have much risk of physical harm while on the job. But sure enough, over time your copywriters all develop carpal tunnel syndrome. The costs associated with the condition quickly add up once you consider the price of…
- Diagnostic tests.
- Wrist splints.
- Steroid injections.
- Surgery, in extreme cases.
- Follow-up exams.
- Ergonomic office equipment (such as split keyboards).
Luckily, an adequate Workers’ Comp policy can shoulder these costs so your small business doesn’t have to pay out of pocket for all these expenses. Plus, keeping your policy in force helps you avoid all those pesky noncompliance fines outlined above.
To learn more about how to handle Workers’ Comp issues, check out our other Workers’ Compensation Insurance blog posts.