Retailers selling in a brick-and-mortar store or via ecommerce have a responsibility to provide a safe work environment. Moreover, they may have a statutory requirement to purchase workers’ compensation insurance to ensure that employees get the care they need to recover and replace wages when accidents happen, and they are unable to work.

The U.S. Department of Labor’s Office of Workers’ Compensation Programs “administers four major disability compensation programs which provide wage replacement benefits, medical treatment, vocational rehabilitation, and other benefits to certain workers or their dependents who experience work-related injury or occupational disease.”

The specifics of these compensation programs are state regulated. So the requirements for a particular retail store or online shop will depend on state law.

It is also important to remember that workers’ compensation benefits can be issued regardless of who is at fault — be it the employee, employer, or even a third party.

Injured employees who accept workers’ compensation benefits may not sue their employers for the covered injury. So there is a sense in which workers’ compensation insurance protects businesses.

As a business grows and hires employees, it will need to get workers’ compensation insurance. <em&gtImage: Oliver Hale.</em>
As a business grows and hires employees, it will need to get workers’ compensation insurance.

Image: Oliver Hale.

Coverage Mandates

If your company has employees (or possibly even contractors), it needs to determine whether state law requires workers’ compensation coverage. The previously mentioned Office of Workers’ Compensation Programs keeps a list of each state’s workers’ compensation office. So this should be your starting point.

There can be significant differences among states. In some cases, even sole proprietors may need to purchase workers’ compensation insurance for family members who help. Or your company might need to cover a contractor working from home in another state. Just be certain to check what the state requires.

A payroll management service or, in some cases, even good payroll software can also help your business determine if workers’ compensation insurance is required. Payroll plays a role in how premiums are calculated, which is why many payroll companies will handle workers’ compensation too.

Insurance Options

In general, workers’ compensation insurance is simply coverage your company buys. What government entity or private insurer your company purchases it from depends on your state’s program.

In many states, a retail business can buy workers’ compensation insurance from a private insurance company. This might be the same company your business uses for general liability or other forms of…