As an employer, you must be prepared for anything that may occur in the field of business. Unexpected expenses can derail company budgets and delay initiatives that were almost ready for the public. Vendors or contractors may withdraw services at the last minute and completely change the company’s outlook for the future. Another unexpected occurrence in business involves one of your employees injuring themselves on the job. An injury can occur due to an accident, horseplay, or any malfunction. Typically, employers take out workers compensation policies to reduce the risk associated with these circumstances. However, self insured workers comp is also an option for employers to consider. As with anything in life, there are risks and benefits associated with self-insured workers comp.
Weighing the Costs and Benefits
When an employer chooses a self-insured workers comp policy, they agree to assume all of the financial risks assumed when an employee is injured while working. The financial risk is the most significant cost with this decision, but it does not necessarily to be negative. Depending on an active policy, differing to an alternative option could prove to be cost-effective for many companies. An employer with self-insured workers comp also has greater control over the policy and can control what is and what is not covered.