One of the best ways to save money when looking for small business insurance quotes is to only buy the coverage you need. Depending on where you live, you may need two or three types of state-mandated insurances covering workers.
You definitely need workers compensation insurance. Every state requires it, although different states have different requirements and differing definitions of what constitutes an employee. Workers’ Compensation insurance is purchased from your state. It was developed after World War I to compensate workers who are injured on the job by paying their medical bills and lost income. Essentially a no-fault type of insurance, the intent was that this would prevent your injured employee from suing you. It doesn’t. You’ll need to get supplemental liability business insurance quotes for that. In the meantime, only buy the bare minimum workers’ comp insurance your state requires and save your money for the liability premiums. In most states, you can get workers’ comp business insurance quotes from private insurance companies. However, currently six states will only let you buy your workers’ compensation from a government-run fund. Another 13 states operate government-run funds in completion with private providers. Check with your state to find out which situation applies to you.
If you have employees, you’re also going to need unemployment insurance. Each state has its own unemployment insurance program that operates within the guidelines established by the federal government. You are required by state and federal law to pay into this fund for every employee, beginning with the first paycheck. Should you fail to do this and an ex-employee files an unemployment compensation claim, the Labor Department will come down on you like the Hounds of Hell, making an IRS audit seem like a picnic by comparison. Don’t risk it. If you’re the forgetful type or just too busy, ask your payroll service, accountant or a good employment attorney to set up your unemployment insurance and make automatic payments for you. There are supplemental unemployment insurance policies available from private providers, but the primary coverage must be purchased through the state.
Temporary Disability Insurance (TDI) is the third type of state-mandated employee-related coverage. TDI doesn’t cover medical care, but it does provide partial wage replacement for workers in the event they are temporarily disabled by a non-work-related sickness or injury (pregnancy counts, too). At the moment, only a few states require it, but more are considering adding it. Check with your state insurance commission to learn about disability insurance requirements and to find out if it can be purchased from a private provider or must be purchased from a government-run fund.