# Workers’ comp, explained for small business owners > Workers’ comp pays medical care and part of lost wages for job injuries and illnesses, plus rehab and death benefits. It’s no-fault: workers get benefits without proving you did wrong, and in exchange generally can’t sue you over the injury. Most states require it once you have employees, sometimes starting with one. Buy it from a private insurer or a state fund; cost depends on payroll and type of work. Report injuries quickly and never retaliate. Going without required coverage brings fines and costs. - URL: https://explained.page/workers-comp-for-employers - Language: en - Last checked: 2026-10-29 - Watch the 1-minute animated guide: https://explained.page/watch?start=workers-comp-for-employers ## Step by step 1. **Have employees? You likely need workers’ comp.** It protects your workers and your business if someone gets hurt on the job. Here’s how it works. 2. **What it covers.** Medical care and part of lost wages for job injuries and illnesses, plus rehab, some lasting injuries and death benefits. 3. **It protects you too.** It’s no-fault: workers get benefits without proving you did wrong, and in exchange they generally can’t sue you over the injury. 4. **Know your state’s rules.** Most states require it once you have employees, sometimes starting with just one. Rules for owners, family members and contractors vary. 5. **How to get coverage.** Through a private insurer, a state fund in some states, or sometimes your payroll provider. Cost is based on your payroll and the type of work. 6. **If someone gets hurt.** Get them care, report the injury to your insurer quickly, fill out the required forms, and never discourage a claim; retaliation is illegal in most states. 7. **Skipping it is risky.** Going without required coverage can bring fines, stop-work orders, and paying an injured worker’s costs yourself. ## Checklist - Know what workers’ comp covers - It’s no-fault and limits lawsuits - Check your state’s requirements - Buy from an insurer or state fund - Report injuries fast; never retaliate - Going without it is risky ## What it covers For injuries and illnesses caused by work, workers’ compensation typically pays: - Medical care. - Part of lost wages while the worker can’t work. - Rehabilitation and some benefits for lasting injuries. - Death benefits for families. ## How it protects you It’s **no-fault**: injured workers receive benefits without proving the employer was negligent. In exchange, workers generally can’t sue the employer over the injury, with some exceptions. ## Is it required? Most states require coverage once you have employees, some starting with your first employee and others at a set number. Rules for corporate officers, family members, and certain industries vary. Contractors usually aren’t covered, but misclassified workers may be treated as employees. ## How to get it - A private insurance company or agent. - A state fund in some states (and a few states require using the state fund). - Some payroll providers offer pay-as-you-go plans. - Larger businesses may self-insure with state approval. Premiums are based on payroll, job classifications and claims history. ## When someone gets hurt Make sure they get care, report the injury to your insurer promptly, complete state forms, post required notices, and never discourage or punish a claim; retaliation is illegal in most states. ## Going without Operating without required coverage can bring fines, stop-work orders, and responsibility for paying the injured worker’s costs yourself. ## Common questions ### How much does workers’ comp cost? It depends on your state, payroll and the risk level of the work. Office jobs usually cost far less than construction. Source page: https://explained.page/workers-comp-for-employers/questions/how-much-does-workers-comp-cost ### Do I need workers’ comp for myself as the owner? It depends on your state and business type. Many sole owners can choose whether to cover themselves. Source page: https://explained.page/workers-comp-for-employers/questions/do-i-need-workers-comp-for-myself-as-the-owner ### Is workers’ comp required for small businesses? Most states require it once you have employees, some starting with one employee. Check your state’s rules. Source page: https://explained.page/workers-comp-for-employers/questions/is-workers-comp-required-for-small-businesses ### What does workers’ comp cover? Medical care, part of lost wages, rehabilitation and some lasting injury and death benefits for work-related injuries and illnesses. Source page: https://explained.page/workers-comp-for-employers/questions/what-does-workers-comp-cover ### How much does workers’ comp insurance cost? It depends on your state, payroll, job types and claims history. Higher-risk work costs more. Source page: https://explained.page/workers-comp-for-employers/questions/how-much-does-workers-comp-insurance-cost ### Can an employee sue me if they have workers’ comp? Generally not over the work injury itself, since workers’ comp is the exclusive remedy, with some exceptions. Source page: https://explained.page/workers-comp-for-employers/questions/can-an-employee-sue-me-if-they-have-workers-comp ### What should I do when an employee gets hurt? Get them care, report it to your insurer quickly, complete required forms, and don’t discourage the claim. Source page: https://explained.page/workers-comp-for-employers/questions/what-should-i-do-when-an-employee-gets-hurt ### What happens if I don’t have required workers’ comp? Possible fines, stop-work orders, and having to pay the injured worker’s costs yourself. Source page: https://explained.page/workers-comp-for-employers/questions/what-happens-if-i-dont-have-required-workers-comp ## Official sources - [U.S. Department of Labor: workers’ compensation](https://www.dol.gov/) - [SBA: get business insurance](https://www.sba.gov/) - [OSHA: workplace safety](https://www.osha.gov/) To find your local office, search for: - "[your state] workers compensation employer requirements" - "[your state] workers comp state fund" --- General information, not legal or professional advice. Rules differ by state. From explained.page (www.explained.page). Life’s stuff, explained simply.