What does workers’ compensation insurance cover, and must we have it if we have paid employees?

Workers’ compensation insurance covers employees against any job-related accident or disease. This insurance pays for medical bills, disability income benefits, and death benefits to dependents of an employee whose death is job-related. Rates are based on payroll and depend heavily on the type of business and the type of work. You should update your workers’ compensation coverage as you hire more employees to avoid being hit with an audited additional charge at the end of the year. Some states offer coverage through a state insurance fund.

Workers’ compensation insurance is mandatory in every state, but there are several exceptions, including some states offering waivers for organizations with few staff. Check with your state’s insurance administration to ensure you comply with regulations.

For more information on insurance needs, read our publication Protecting Your Small Foundation With Insurance and consider the valuable insurance discounts available to Exponent Philanthropy members.

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