You might be wondering why workers’ compensation is necessary for smaller businesses in South Africa, however this country is home to a thriving small business market. In fact, according to a McKinsey report in 2020, small-to-medium businesses in South Africa represent more than 98% of businesses.

We owe a lot of thanks to these small business owners, who, as a result of their intrepid entrepreneurial spirits, employ between 50 – 60% of the country’s workforce across all sectors.

This rather neatly brings us to the matter at hand, which is whether or not your small business should get workers’ compensation insurance.

Let’s dive into what this cover is, whether you should get it, and the 4 pretty big reasons why it’s worth considering.

A closer look at workers’ compensation insurance

Workers’ compensation insurance covers the costs related to injury, disability, or illness that your employee, or employees, sustain while at work.

Here’s what this policy could cover:

·         Claims related to occupational injuries, illnesses, or death.

·         Other hidden costs incurred as a result of the injury or disease.

·         Hospitalisation costs.

·         Rehabilitation or physiotherapy.

·         Missed salary or wages.

·         Trauma counselling.

·         Funeral costs.

·         Income support for widows or widowers and dependents for a set period.

How it works

In South Africa, you’ll need to first check that your business qualifies to get this type of insurance. It may not be necessary. However, if it’s necessary and you do qualify, you’ll need to register with the Government’s Compensation Fund and pay the annual fees.

By keeping up to date with your fees, you’ll be in a position to give your employees access to medical benefits while covering your business against these costs.

Does your business qualify for workers’ compensation insurance

No matter how small your business is, if you have 1 or more employees then your business is eligible to get workers’ compensation insurance. So it’s not always a matter of size. Think about the difference between a domestic worker who has sought contracts in various single households. This person wouldn’t be eligible to get workers’ compensation insurance, however a person who runs a cleaning service and hires multiple domestic workers would be eligible.

Those who aren’t eligible for workers’ compensation include:

·         Freelancers.

·         Subcontractors.

·         Individuals working outside of South Africa.

·         Civil servants who work in state defence and law enforcement (think SAPS).

·         Volunteers.

·         Seasonal or casual workers.

4 reasons to get workers’ compensation insurance

·         The financial impact: If something happens to your employees while they’re working, then it’s likely that you’ll be responsible for the associated expenses, including any lawsuits brought against you. But if you have workers’ compensation, you can offset these financial setbacks.

·         Increase loyalty and attract top talent: Staff turnover isn’t only frustrating, it’s expensive to find, hire, and train new employees. However, investing in a means to financially assist your staff if something goes wrong, shows that you care about their wellbeing.

·         Encourage safety: To reduce possible mishaps and decrease the potential for employee claims, businesses who get workers’ compensation are more likely to go a step further and make improvements to safety and wellness measures in the workplace.

·         Accidents happen: The reality is that accidents happen and as the employer, it’s your responsibility to make sure that your staff have a reasonable and lawful degree of safety in the workplace, and if they should be involved in an incident, be in a position to provide the relevant financial assistance.

We trust that this information will point you in the right direction and help you make the right decision when it comes to covering yourself, your employees, and your business from the risks that may come your way.

The thing is, running a small business comes with many challenges, often similar to their larger counterparts. Thankfully, no matter the size of your business or how many people you employ, you can also invest in quality and affordable business insurance.

A good place to start looking for the right cover is through a business insurance broker who can best advise you on workers’ compensation insurance and the type of business insurance that your business needs. In fact, you’ll find that this royal insurance company allows you to customise your cover. You can work through your broker to achieve this. And if you don’t have a broker, they’ll put you in touch with 1 you can rely on.

Click here to find out more or to get a commitment-free quote.