Whether you have a small, medium or large business concern that you own or operate, you need to consider the best business insurance options available to meet your obligations under your state's unemployment insurance or compensation program. Unemployment insurance acts as a stop gap for those former employees of yours who temporarily separate from employment and are between jobs.
In normal times, unemployment benefits last up to a maximum of 26 weeks (or 30 weeks for Massachusetts workers) in an amount up to half an employee’s weekly pay (capped at a state’s maximum weekly benefit amount). This limit on benefits payable serve as an incentive against “malingering” – a desire not to go back to work. Although benefits are paid by the state (funded jointly through state and federal unemployment taxes), you have a role to play in funding unemployment benefits.
Unemployment Insurance Coverage
You as a business owner, through your accountant or payroll processing service, pay two types of taxes that go to the unemployment fund. These taxes are paid under the Federal Unemployment Tax Act (FUTA) and State Unemployment Insurance (SUI). The commitment to provide for (certain) employees who terminate their relationship with you as a business owner is born out of the Social Security Act of 1939. Those employees who qualify for unemployment, traditionally, are employees who are wage employees (receive a W-2) are eligible for unemployment benefits.
Supplementary Employee Unemployment Benefits
Although the unemployment system provides benefits for most of your rank and file employees, what protections are in place for you as an owner should you have to shudder your doors? Even at more than $800 weekly if you are a Massachusetts resident, the amount of benefit would not be sufficient to replace the lost income of higher wage earners in your business like yourself.
A personal supplemental income insurance policy may be something you would want to consider for yourself or that of certain key employees in your business as a benefit. This type of coverage, as part of your overall business insurance protection, gives you the peace of mind should a catastrophic event like a pandemic that your income is protected for as long as the business needs to be closed (through no fault of your own). You certainly owe yourself the discussion with an insurance agent to find out if this form of business insurance is right for your business.