Businesses in Massachusetts that have employees are generally required to carry workers compensation insurance. If you run a business in Montgomery, MA that is supposed to offer employees coverage but doesn’t, here are some of the potential consequences your business could face.
If Your Business Doesn’t Purchase Workers Compensation Insurance, What Happens?
Massachusetts May Assess Legal Fines
If your business is required by Massachusetts law to carry workers compensation insurance and doesn’t, there could be legal consequences. According to Mass.gov, your Montgomery, MA business may be issued a “stop work order” and fined $100 per day. You can appeal such an order, but filing an appeal may cause the fines to increase to $250 per day if the appeal is unsuccessful.
Future Insurance Premiums Could Increase
One of the factors that insurers consider when underwriting workers comp insurance policies (and many other types of policies) is whether the policyholder has had any coverage gaps in the past. If there have been, insurers often charge higher premiums.
Just a one-day gap could lead to future premium increases for your business, and multi-day gaps could make those increases even larger. In many cases, these increases last for several years, so your business could end up paying for the gap several times over.
Your Montgomery, MA Business May Be Held Responsible for Employees’ Injuries
If an employee suffers a work-related illness or injury, your business may be forced to pay for both the employee’s medical care and any lost wages. These are expenses that workers comp insurance typically covers. Without coverage, though, your business may be held liable and have to pay for these expenses itself.
Owners Who Are Injured Might Not Be Covered
Should an owner sustain a work-related illness or injury, they may not have coverage for their medical bills (or their lost wages). An owner might be able to seek compensation from the business, but many owners are, understandably, hesitant to sue their own company.
Some owners mistakenly they don’t think they’re at risk of becoming ill or being injured. Almost anyone can suffer a work-related illness or injury. For instance, repetitive motion injuries, like carpal tunnel syndrome, can be caused by typing. Similarly, people can tweak their back, twist their ankle, or suffer any number of other injuries while merely getting up from a desk or walking around an office.
Furthermore, many business owners don’t have coverage for medical bills that arise from work-related incidents. Some health insurance policies offer riders for injuries and illnesses that are caused by the policyholder's employment, but most exclude work-related medical issues from their coverages.
Without protection from an insurance policy, an owner who becomes ill or is injured may be forced to either pay for their medical care out-of-pocket or seek financial compensation from their own business.
Future Claims for Repetitive Motion Injuries May Be Denied
Workers comp insurance claims typically only cover injuries that are sustained while coverage is in effect. For many incidents, it’s clear when an injury occurred. For repetitive motion injuries, however, the timing of an injury’s onset is sometimes less cut and dry.
Often, repetitive motion injuries develop over a prolonged period of time. If your company has a lapse in coverage and an employee’s work during the lapse contributes to a repetitive motion injury they sustain, the employee’s claim might be denied because coverage wasn’t in effect the entire time.
Make Sure Your Business Has Workers Compensation Insurance
With so many potential risks and penalties, it’s generally not worth going without workers compensation insurance if your company is supposed to have it. To make sure your company has the workers comp insurance coverage it should be carrying, contact an independent insurance agent serving Montgomery, MA. They can review your business’ situation and recommend an insurance solution that will ensure everyone -- owners, employees and the business alike -- is properly protected.