Expanding your business by hiring more employees is a big next step, worthy of a congratulations. In this tight job market, good candidates are interviewing you every bit as much as you are interviewing them. Having everything together allows you to make a good impression and hire the good ones before they go looking elsewhere. Before beginning your search for suitable candidates, it’s important to do your homework to safeguard your business and prepare for the responsibility (and risks) of personnel.
1. First Up, Organize Your Logistics:
According to the U.S. Small Business Administration, your first step should solidify an understanding of what’s legally expected of you. If you haven’t done so already, create a plan to pay your employees, and comply with federal and state tax and labor obligations. Investing in this process will help you avoid unwanted surprises. Not sure where to start? Begin with this checklist.
2. Know Workers Compensation & Group Benefits:
Your state will most likely require you to offer your employees wage replacement and medical benefits in case of a work-related injury or illness, also known as Workers Compensation. Depending on where you conduct business, this is purchased through a commercial carrier or through a state program.
Group benefits, such as Group Life, Disability, or Health Insurance, can also be a valuable form of compensation and appeal to quality candidates. Essentially, these are single-contract insurance products intended to cover an entire group of people, most often purchased by an employer to cover employees.
It’s important you sort all compensation details out before interviewing not just for your own protection, but out of fairness to your future employee(s).
3. Get Employment Practices Liability Insurance (EPLI):
The instant you conduct an interview; you acquire employment risk exposure. Even a rejected candidate can sue for wrongdoing. Small businesses are usually still developing employee policies and don’t have the capacity for a legal department. Before you release your job description, it’s wise to invest in EPLI.
EPLI is designed to financially protect a business, its owners, managers, officers, and/or employees in case they are sued for the following offenses (just to name a few):
4. Create Written Policies & Procedures:
Although not required, this can help reduce your risk of liability. Maintaining proper written procedures informs employees how the business manages potential causes for claims, such as attendance, discrimination, paid time off, etc. Some of our insurance carriers have free resource libraries to help policyholders create written policies and procedures, but we always recommend working with your lawyer to ensure compliance with local, state, and federal laws. Here is the official resource for your records.
5. Always Keep Your Insurance Advisor in the Loop
Once you hire your new employee(s) remember to tell your insurance advisor. This is considered a Qualifying Event. These events are changes to or within your business that can impact your Commercial Insurance policy. Qualifying Events allow you to request an update prior to your annual renewal date, so that you don’t have out-of-date language, leading to holes in coverage. This also keeps your coverage relevant. For example, if an employee will be interacting with business finances, you may need Crime Coverage. This ensures the most thorough, practical, and customized coverage.
Want to learn more about the coverages specific to your industry? Learn more here.