Workers Compensation insurance is required in most states to pay benefits to workers injured on the job. It protects the employees from incurring medical debt or loss of wages due to an on the job injury. The Employer’s Liability portion of insurance provides immunity to the employer from civil lawsuits relating to the accident or incident that may have caused the injury. Workers Compensation insurance provides the following benefits: death benefits, vocation rehabilitation and job displacement, temporary and long-term disability and medical care.
1. All private employers regularly employing 1 or more employees 35 hours or more per week for 13 weeks or longer during the receding 52 weeks.
2. All private employers regularly employing 3 or more employees at one time (This includes part-time employees.)
An employee is any person in service of another, under any contract of hire, express or implied. A partner is considered an employee of the partnership, a corporate officer is considered an employee of the corporation, and a member who is a manger is considered an employee of a limited liability company.
A sole proprietor (self-employed individual) working in his or her sole proprietorship is never an employee of that business.
Premiums are not only based on payroll and your company’s services. Employees are classified by their specific work duties. A specific rate is assigned to each employee’s classification code. This rate can vary from insurance carrier to insurance carrier. The premium is also affected by the cost of claims that are filed by the workers.
Failing to carry workers compensation coverage is a criminal offense. If an employee gets hurt or sick because of work and you are not insured, your company is responsible for paying all bills related to the injury or illness. If you are illegally uninsured and an employee gets injured or sick because of work, that employee can file a civil action against your company in addition to filing a workers compensation claim.