Workers’ comp law in Virginia requires that employers must carry a policy if they have more than two employees. This insurance coverage is meant to protect anyone who gets injured on the job and needs medical treatment.
Workers’ comp requirements in Virginia
Employers need to have workers’ compensation coverage. The state defines an employee as anyone working part- or full-time, seasonal and temporary workers, minors, immigrants, trainees and any working family members. Officers and LLC managers are employees whether or not they perform regular duties or earn a salary.
Direct and indirect costs of accidents
Direct costs are workers’ compensation expenses applied to the accident and perhaps additional costs. Direct costs depend on the severity of the accident and its repercussions. Costs can start at $1,000 and go into $50,000 or more. You also factor in lost time while employees recover.
Indirect costs entail those items associated with accidents that are not insured. Indirect expenses tend to be greater than direct ones. These monies come straight out of corporate profits.
Examples of indirect expenses
Though circumstances can vary based on a variety of factors, there are some costs that can put a company in the red. These include:
- Loss of production time
- OSHA penalties
- A worker who must be trained to replace the injured party
- Reduced morale and lowered efficiency
- Paperwork generated by the accident
- Cleanup and startup of interrupted operations
- Time and cost to repair or replace damaged equipment, materials or property
- Cost of continuing all or part of the injured person’s wages and compensation
There’s also the threat to reputation. A business with a poor record of protecting employees and visitors cannot stay as competitive because controversy can hinder growth and success. Adequate workers’ compensation coverage is the first step to presenting a business as reputable and concerned about the safety of its people, and it supplies much-needed benefits to injured workers.