Who Needs Workers Compensation Insurance?

Laws for workers compensation can be confusing, as they vary by state. As a rule, any business owner that employs workers should look into workers compensation.

What is Workers Compensation Insurance?
Workers compensation is a type of insurance that helps when an employee is injured at work. This insurance provides compensation for:

Medical Expenses: Medical expense coverage helps reimburse the employee for any legal expenses associated with the work injury.
Disability Benefits: If the employee is disabled partially or totally, disability benefits will help with the cost associated with the disability. It also covers rehabilitation services.
Wage Replacement: This coverage compensates for the employee’s wages while they are unable to work due to the injury.
Death Benefits: In the unfortunate case that an employee passes away due to a workplace accident, death benefits may be paid to the late employee’s family.

The amount of compensation received depends on the extent of the injury. This insurance is also in place to help prevent employees from suing the company. If an employee accepts workers compensation benefits, they are generally not allowed to sue the employer for the same injury.

Is Workers Compensation Legally Required?
Depending on where you live, workers compensation may or may not be required. The limits of workers compensation will also vary per state.

The only state that doesn’t require workers compensation is Texas. You are not legally required to carry workers compensation if you own a business in Texas, though it is highly recommended.

States Requirements
1 or more employees:

Alaska
Arizona
California
Colorado
Connecticut

Delaware
District of Columbia
Florida
Hawaii
Idaho

Illinois
Indiana
Iowa
Kentucky
Louisiana

Maine
Maryland
Massachusetts
Michigan
Minnesota

Montana
Nebraska
Nevada
New Hampshire
New Jersey

New York
North Dakota
Ohio
Oklahoma
Oregon

Pennsylvania
South Dakota
Tennessee (only for construction or coal mining trades and businesses)
Utah
Vermont

Washington
Wyoming

2 or more employees:
Virginia

3 or more employees:

Arkansas
Georgia
New Mexico
North Carolina
Wisconsin

West Virginia

4 or more employees:

Rhode Island
South Carolina

Five or more employees:

Alabama
Mississippi
Missouri
Tennessee

Depends on income:

Iowa
Kansas

Keep in mind that there are some different exceptions and requirements per state, so be sure to check with your state about your business’ requirements.

Why You Need Workers Compensation
Even if you are not legally required to have workers compensation, you should consider it if you employee any workers. No matter how much you put in to preventing injuries, accidents happen. Not only is it important for employees to be able to seek medical help immediately without worry of expenses, but it’s also important to protect the business. Having a workers compensation policy in place helps prevent claims. If an employer has workers compensation, employees typically can’t sue the company for injuries obtained on the job.

Whether you have one employee or a thousand, accidents can happen anywhere at any time. Some industries have higher rates of workers compensation claims, however, such as:

Nursing and residential care
Animal production
Manufacturing
Air transportation (pilots, mechanics, freight agents, etc.)

Labor
Trucking
Retail
Construction
Delivery services

If your business falls into one of these industries, you will want to be especially careful when it comes to accident and injury prevention. Physical jobs such as construction, labor, nursing and trucking tend to have more injuries due to the risk of pulls, sprains and breaks. Employees who operate with or around heavy machinery are at more risk for extreme injuries.

If an accident does happen and you don’t have workers compensation, your company could be looking at a lawsuit to pay for the employee’s work injuries.

Who Needs Workers Compensation Insurance?

No Comments