In a new study by Insureon, less than 1 in 5 small businesses carry workers' compensation. Although all State regulations require that small businesses have workers' compensation, this study indicates that workers' compensation is the least purchased insurance by small businesses. (In Wisconsin, employers must have workers' compensation if they hire only one employee paying more than $500 in a quarter or hire any three employees at any one time.) The President of Insureon Jeff Somers said in an interview with workerscompensation.com that "small businesses often fail to carry workers' compensation because they truly do not understand their insurance need; there is a major lack of awareness and education which insurers and brokers can alleviate. One reason for this protection gap is a misplaced anxiety around how much workers' compensation coverage actually costs, but when you compare the small price. . . the protection workers' compensation provides makes an investment worth it."
According to the Bureau of Labor Statistics, almost 3 million workplace injuries were reported by private industry employers in 2016, with nearly one-third resulting in time away from work. The Insureon statistics showed that one in three businesses reported an incident that could have been covered by a workers' compensation insurance policy and that one-fifth of all small businesses that filed for bankruptcy in 2016 did so because of lawsuits. Workers' compensation protects an employer from a lawsuit. (In Wisconsin a worker injured by an uninsured employer has access to the Uninsured Employers Fund. After the Fund pays workers' compensation benefits, the Fund then pursues reimbursement from the employer.)