Ruth Susswein: Hi, I'm Ruth Susswein from Consumer Action. Today I'm going to discuss insurance you'll need if you hire employees for your home based business including Workers' Compensation and Unemployment Insurance.
Let's talk about Workers Compensation. Although insurance requirements differ by state, typically employers must provide workers' compensation and unemployment insurance, even micro businesses with only one to three employees should have workers compensation to cover on the job injuries. Workers' Compensation provides wage replacements and medical benefits to those who are injured while working.
In exchange for these benefits the employee gives up the right to sue the employer for the incident. Some states only require coverage when you have three or more employees; other states exempt employees who earn only commission, while coverage rules vary one message remains constant, as an employer you can be held financially responsible for injured workers. Usually sole-proprietors and partners are not required to provide workers' compensation for themselves; cost of workers' compensation depends on your company's size, type of industry and history of work related injuries. You may also be eligible for special discounts, if you belong to a trade association for example, you may be eligible for a reduced premium.
Now, let's talk Unemployment Insurance. Typically businesses that hire even one employee must pay unemployment insurance tax and are required to register each employee with a state, quarterly tax payments go to your State's Unemployment Compensation Fund which provides short term relief to workers who lose there jobs. The U.
S. Small Business Administration offers information about insurance requirements for employers, running a home based business or micro business takes time, effort and creativity.
Having the right insurance can allay some worries so that you can give your business its best shot at success.