Small businesses are the backbone of the South African economy, representing more than 98% of businesses in the country. That’s no exaggeration, and neither is the claim that the SME market employs between 50 and 60% of the country’s workforce across all sectors. As a result, in South Africa, we take these businesses very seriously and have a number of rules and regulations for them to comply with. One of these is workmen’s compensation insurance.
As a small business owner, you may be wondering whether or not your business should get worker’s compensation insurance. It’s a good question to ask yourself. So let’s explore what worker’s compensation insurance is, whether your business qualifies for it, and what the legalities are around getting this cover.
A closer look at worker’s compensation insurance
Workmen’s compensation insurance covers the costs related to injury, disability or illness that your employees sustain while at work. Upon closer inspection, you’ll find that this policy has the power to cover claims related to occupational injuries, illnesses, 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, and income support for widows or widowers and dependents for a set period.
How this cover works
So, does your business need to get this cover? Well, no matter how small your business is, if you have 1 or more employees, then your business is eligible to get worker’s compensation insurance.
In South Africa, you’ll need to register with the government’s Workmen’s Compensation Fund and pay the annual fees so that you’ll be in a position to give your employees access to benefits. Not forgetting that you’ll also be able to protect your business against paying for these costs.
Of course, there are exceptions. For instance, freelancers, subcontractors, individuals working outside of South Africa, civil servants who work in state defence and law enforcement, volunteers, and seasonal or casual workers aren’t considered eligible for worker’s compensation.
So let’s talk legal requirements for small businesses
Worker’s compensation insurance is compulsory for businesses that have employees in South Africa (with a few of those exceptions we mentioned). Let’s review some of the legal requirements involved when your small business needs to get worker’s compensation insurance in South Africa.
- Number of employees: The number of employees determines when a business needs worker’s compensation insurance. Most often, it’s required as soon as you hire your first employee. In South Africa, if you have 1 or more employees, then your business is eligible to get worker’s compensation insurance.
- Registration: Businesses that need worker’s compensation insurance must register with the government’s Workmen’s Compensation Fund and pay the annual fees.
- Penalties: The penalty for not getting worker’s compensation insurance when it is required varies. It can result in a fine, or jail time, or both.
- Eligibility: Freelancers, subcontractors, individuals working outside of South Africa, civil servants who work in state defence and law enforcement, volunteers, and seasonal or casual workers are not eligible for worker’s compensation.
Running a small business comes with many challenges, so we hope that this info has proven useful. One thing’s for sure… It doesn’t matter how big your business is or how many people you employ, all businesses need affordable business insurance. We suggest that you work through a business insurance broker who can best advise you on worker’s compensation insurance and the type of business insurance that your business needs.
In fact, you’ll find that this royal insurance company not only allows you to customise your cover, but they’ll also only 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.
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