Why You Should Maintain Workers’ Compensation Insurance

StrategyDriven Managing Your People Article |Workers' Compensation Insurance|Why You Should Maintain Workers’ Compensation InsuranceAs an entrepreneur, you are starting your business and have to make tough choices about where to put your money. Rent physical space or go virtual? Do your own books or hire an accountant? Pay for answering service or hire a receptionist?

The answers to these questions will vary depending upon the type of business you are starting, what your skillset is, and how well your project is funded. One thing you should not skimp on if you have employees is purchasing workers’ compensation insurance.

Why? Because if you don’t have workers’ compensation insurance and one of your employees is injured in a workplace accident, or develops a disease or condition as a result of the workplace conditions or duties, you will likely be on the hook for their medical expenses and lost wages. In many states, that is not all… you can be fined by a workers’ compensation judge, or prosecuted for a crime by your state’s Department of Justice.

Read this article for the consequences you can avoid if you just purchase workers’ compensation for the employees of your business.

How Workers Compensation Works

The reason every state has a workers’ compensation statute mandating the purchase of workers’ compensation insurance for most employers is to remove the issue of liability from workplace injuries, provide lost wages and medical expenses for the injured worker, and lift responsibility from the employer.

The public policy concerns resolved by the workers’ compensation statute are preserving the employer-employee relationship, helping workers recover from their injuries and get back to work, and avoiding lengthy, expensive, litigation between employers and their employees over who is at fault for causing the injury.

If a worker is injured, typically, the worker will inform the employer and seek medical attention. Most statutes provide a timeline for this and give the employer and the insurer the right to specify the medical professionals an injured worker must first consult.

Employers are usually required to post notices of workers’ compensation coverage and the procedure for filing a worker’s comp claim in a conspicuous place at work, such as a break room. The worker will complete and submit the required forms, and generally, in as little as a few weeks the worker will receive compensation for the injury in the form of medical expenses and lost wages. If the worker is unable to work for a time, the worker may also receive partial or total temporary or permanent disability compensation.

If an employer does not have workers’ compensation insurance but should, the injured worker can seek recourse in workers’ compensation court and in some states, can sue the employer directly. But that employer’s employees are not the only stakeholders in the employers’ decision not to carry worker’s compensation insurance – the state is.

Because your state has a stake in whether your business has workers’ comp insurance, your state legislators will have specified in the statute what penalties will apply if an employer fails to comply with the mandates of the statute. In many states, failure to comply is a criminal offense and individual owners of a business without workers’ compensation insurance can be fined and jailed.

A Judge May Impose Civil Fines and Penalties for Failing to Comply With Your State’s Workers’ Compensation Statute

Every state’s workers’ compensation statute is a bit different, but most states require employers with at least one employee to purchase workers’ compensation insurance. If a worker is injured and goes to workers’ compensation court, the judge has the authority to not only assess the worker’s medical expenses and lost wages against an uninsured employer but fine that employer in addition, in an amount that will match the egregiousness of the conduct.

In some states, there is an uninsured employer fund that the worker can access to receive compensation more timely, and you as the uninsured employer must repay that amount as well as any fines or penalties provided for your state’s statute.

Employers Without Workers’ Compensation Insurance Can Be Criminally Prosecuted

Failing to purchase and maintain workers’ compensation for employees is a crime in most states. The degree of the crime, the fines and penalties, and the jail sentences imposed upon business owners will vary state-to-state.

For example, in Pennsylvania, failing to maintain workers’ compensation insurance is a third-degree misdemeanor, the punishment being a $2,500.00 fine and up to 1 year in jail. If an employer’s failure to maintain insurance is intentional or willful, that failure is a third-degree felony and the punishment is a $15,000.00 fine and a jail sentence of up to seven years.

Know that in most states, every day the business fails to carry workers’ compensation insurance can be charged as a separate crime. A lengthy amount of time in operation without workers’ comp insurance will certainly enhance the fines, penalties, and jail sentences.
Workers’ compensation insurance protects not only your employees, but you, the business, and other owners of the business if any. Find somewhere else to save money if you need to.

About the Author

StrategyDriven Expert Contributor |Veronica BaxterVeronica Baxter is a legal assistant and blogger living and working in the great city of Philadelphia. She frequently works with Larry Pitt, Esq., a busy workers’ compensation lawyer in Philadelphia.

How to Start a Painting Business From Scratch

StrategyDriven Starting Your Business Article |Start a Painting Business|How to Start a Painting Business From ScratchIf you’re handy with a brush and paint rollers, you may want to consider going into business for yourself as a professional painter. Your startup costs will be negligible and there’s a huge market out there for you. What do you have to lose?

However, you may feel a bit hesitant to jump on this opportunity if you don’t know the first thing about starting a business. Don’t worry, learning how to start a painting business isn’t incredibly difficult. And we’re here to help.

Keep reading for everything you need to know.

1. Research the Local Painting Market

Before you dive headfirst into the professional painting industry, you need to make sure there’s room in your community for your company. You also need to find out more about the costs of doing business, who you’re going to market to, and how much you can expect to earn with your company.

Ask yourself some important questions:

  • What is the local competition like?
  • What are they doing right/wrong?
  • How can I be better/different?
  • Who will I market to?
  • Do I have a niche in the industry?
  • How much money do I need to get started?
  • What are the costs of day to day operations?

Successful businesses are built on in-depth market research.

2. Create a Business Plan

Next, you need to create a business plan to serve both as your business blueprint and as your means of financial assistance. Creditors, lenders, and investors will want proof that you know what you’re doing. They’ll use your business plan to determine your credibility and the potential of your business.

Make sure it includes:

    • An executive summary of the business
    • A description of the business
    • Your market research and analysis
    • The structure of your company (organization and leadership)
    • A description of your services and products
    • Your marketing strategy and analysis of your target audience
    • Your funding requests
    • Financial projections of your business (ranging from the first year to several years)

Don’t skimp on your business plan, there’s a lot riding on it. It needs to be thorough and well-researched.

3. Get Financed

As noted, learning how to start a painting business may mean getting the startup funds you need. With your business plan in hand, apply to your bank for a small business loan. However, if you get rejected here, all is not lost.
There are several other options, such as:

  • Private investors (friends, family)
  • Angel investors
  • Crowdfunding campaigns
  • Personal loans
  • Trade future services for startup funds
  • Etc.

If you have poor credit and bad luck with investors, get creative to earn money to finance your business.

4. Take Care of the Logistics

Once you get the funds you need, you can start taking care of the logistics. For example, you can start procuring the official certifications you need to operate legally. In most states, you need a specific license to be a professional painter on top of the business license you need from the city.

You’ll also need to look into liability insurance for painters. This will protect you financially if you inadvertently cause damage to a customer’s home or business.

5. Start Marketing

Finally, learning how to start a painting business and make it successful means learning how to market to potential customers. You must strive to gain brand recognition within your community. They need to think of your painting business logo when they think of professional painters.

Here are our top marketing suggestions:

  • Build a user-friendly website
  • Perfect your website SEO
  • Get on social media
  • Use PPC and SEM marketing
  • Create a blog on your site

Experiment with different methods of marketing to determine what works best for your business. Don’t be afraid to invest resources in building brand awareness.

Looking for More Tips on How to Start a Painting Business?

Are you new to the world of entrepreneurship? Don’t feel bad, everyone has to start somewhere. Fortunately, there are people like us around to help.

Our blog is designed to help people like you carve their way into the business world. Whether you want to know how to start a painting business or are looking for the best marketing tips, we can provide answers. Be sure to check out some of our other articles before you go.