Do You Need Workers Compensation Insurance for a Family Business?

At Colling Insurance Services Inc. serving the greater Lakewood, CO area, we are often asked questions about workers compensation insurance and family owned businesses. Many small businesses wonder if they need this type of insurance if they are a family owned and run a business. Here are a few questions you should ask yourself when determining if you need workers comp insurance. 

Do You Have Employees? 

If you have any employees who are not family, even if it is just one person, you need workers compensation insurance. Many family-owned businesses have outside help from non-family members.  If you do not have any employees, you may not need workers compensation insurance. 

Are Your Family Members Helping or Employees? 

The next question to ask yourself is whether your family members are helping you out or are employees. Do your grown kids stop by your shop and help you out for a couple hours a week in their free time, or do they have a set schedule they have to work? If they have a set schedule and you rely on them, they are likely considered employees and you should cover them under a workers compensation policy. 

Do You Pay Your Family Members as Employees? 

The last question to ask is whether you pay your family members as employees. If you slide them $20 here or there for helping you out with a project, they may not be employees. But if you pay them weekly or bi-weekly for their work, they are an employee and you need to cover them with workers compensation insurance. 

If you still are not sure if you need workers compensation insurance in the Lakewood, CO area, let Colling Insurance Services Inc. help. Call us today and one of our agents can answer your questions and determine whether you need this insurance coverage or not.