Workers' Compensation Insurance: Why Does Your Coffee Shop Need it?
According to reports, food and beverage workers suffered over 26,000 non-fatal injuries over a six year period. During this same time, 141 fatal injuries took place.
Not all of these accidents occurred in coffee shops, as the data covers restaurant workers as well. However, if you think that your coffee shop does not need Workers' Compensation insurance, you need to reconsider.
Otherwise, you might end up in financial straits, thanks to an unforeseen employee injury.
To avoid this, keep reading and find out all the reasons why Workers' Compensation insurance for small businesses is so important, especially when it comes to coffee shops.
What Is Workers' Compensation Insurance for Small Businesses?
Before we answer the question "do I need Workers' Compensation insurance", let's quickly define what it is.
Workers' Compensation insurance is a form of insurance that provides coverage for the costs associated with workplace accidents. As a business owner, you have a legal responsibility to your employees to financially assist them if they are injured at work.
This assistance includes:
- Coverage of medical/treatment costs
- Missed wages or disability compensation
Workers’ Compensation coverage insures you as a business owner against these types of liabilities.
Do I Need Workers’ Compensation Insurance for My Coffee Shop?
The short answer to this is yes. There are a number of reasons why as a coffee shop owner, you should consider taking out Workers' Compensation insurance for your small business.
It's Probably Law
Depending on what state your business is in, you might be required by law to have Workers' Compensation coverage. Each state has differing stipulations surrounding Workers' Compensation insurance.
Of these, most require it by law. Texas is the only state where Workers' Compensation insurance for small businesses is not mandatory.
Many other states, on the other hand, require you to take out Workers' Comp coverage as soon as you take on your first employee. Many of these states inflict heavy penalties on those who do not comply.
These states include California, Illinois, Pennsylvania, and New York, and penalties range from fines to jail time for non-compliance.
While we are on the topic of state laws, you might be wondering "do I need Workers’ Compensation insurance if I have no employees?"
The answer to this is probably not. Workers' Compensation insurance for small businesses is typically not required by any state if there are no employees.
Coffee Shop Environments Pose a Number of Risks for Employees
Besides that fact that it is probably mandatory for you to have Workers' Comp—depending on what state you are in—it is also the wise choice if you own a coffee shop.
Coffee shop environments are safer than sectors like construction. However, there are still a number of common workplace accidents that can occur.
Slips and falls are not unusual in coffee shops as employees have to do a lot of walking and are often in a rush to get customers served as quickly as possible. Coffee and other beverage spills increase the likelihood of slips, as does frequent mopping.
Back injuries are another possibility, as employees often need to carry heavy trays while negotiating tables, customers, and other staff.
Burns are also a common coffee shop and beverage industry injury.
If you are running a tight ship, you probably want all the coffee that is served to be as hot as possible. This is great for customer satisfaction, however, piping hot coffee can serve up severe burns if spilled.
Other types of burn injuries that are common in coffee shops are steam burns and contact burns from hot milk wands on espresso machines.
Finally, one of the most typical coffee shop employee injuries is Barista Wrist. This comes from continued and repetitive strain on the wrist that results from operating espresso machines.
According to data, this injury type is one of the highest 'lost time injuries' in the restaurant industry. The average amount of time it takes for someone to recover from Barista Wrist is 366 days—which is over a year.
As an employer, the last thing you can afford is to compensate someone for extended time periods while they are unable to come to work.
Workers' Compensation Lawsuits Can be Costly
Having to meet a Workers' Compensation claim out of pocket can be a crippling expense.
Depending on the injury type, you might need to pay out a substantial amount for medical treatment. Once that is covered, however, you may also need to compensate your employee a portion of their salary if they are unable to come to work.
This is referred to as lost time and can have a compounded negative effect for employers. Not only do you have to pay the employee a portion of their salary, but you will also be down one staff member.
Coffee shops have the highest lost-time stats in the industry. According to statistics, coffee shops have 45% more lost time than any other restaurant type.
Workers' Compensation insurance for small businesses is important (and usually legally required) in any industry. However, for coffee shop owners it is doubly important.
Most coffee shops do not have the financial liquidity or capacity to cover serious incidents and extended periods of lost time. If you are just starting out, having to weather a heavy Workers' Comp claim could even spell the end for your coffee shop business if you do not have the capital to cover it.
If you are located in a state where Workers' Comp coverage is required by law—the penalties you might incur could add to any chance of bankruptcy.
How Much Is Workers' Compensation Insurance?
If you are wondering how much is Workers' Compensation insurance, there is not a one-size-fits-all answer. Costs can range anywhere from $35 to $2,876 per employee per year.
To get an accurate estimate of what your costs would be, request a free quote from us.
Keep Yourself, Your Business, and Your Workers Safe
Workers' Compensation insurance for small businesses is essential if you want your business to survive and thrive.
Taking out Workers' Compensation insurance will help ensure that you are protected against compensation claims, lawsuits, and legal penalties. If you choose a provider that assists you with minimizing injury incidents, you will also be protecting your employees from unnecessary accidents.
To take your business's financial security up another level, you can also consider taking out a Business Owners Policy or general coffee shop insurance.
If you have any questions about either of these, please feel free to contact us and we would be happy to assist you.