Many business owners wonder if they should include themselves in the workers compensation policy for the company. Rarely does this make sense, for the following reasons:
Insurance companies regard workers compensation coverage for company owners as a moral hazard; that is, if the business experiences financial problems, the owner may be incented to stage a workplace accident or otherwise compromise the guidelines of the policy. As a result of this inherent risk, workers compensation coverage for company owners is generally cost-prohibitive.
Moreover, workers compensation policies are not designed to provide adequate coverage or compensation in cases where the owner becomes incapacitated due to illness or accident that is unrelated to the workplace. Therefore, disability insurance and life insurance become logical choices for business owners concerned with protecting their ability to meet financial obligations, continue to earn income, and protect future income. Life and disability policies provide sound alternatives to the limited benefits of workers compensation insurance.
If you are a business owner in need of a trustworthy professional with whom to discuss insurance and asset protection, we would be happy to provide you with a personal recommendation.
As always, we’re here to provide the resources you need.
~Time 4 Payroll