When do I need workers’ compensation insurance?

When Do I Need to Have Workers’ Compensation Insurance?

One of the developing trends we have noticed in the Workers’ Compensation arena is Employers who are being penalized for not having workers’ comp insurance even when no employee has reported an accident. Prior to the last six months we had not seen penalties assessed without an injury; but, this has become something we are seeing more and more frequently, which begs the question, who need workers’ compensation insurance?

Every employer with three (3) or more employees needs worker’s compensation insurance. This means that if you run a small business with two part time workers you must have insurance or you could be subject to a penalty.  The employer does count towards the three person quota.

There is also a quirk in the statute for contractors. If a contractor subcontracts for the performance of any work, and the subcontractor does not have workers’ compensation insurance that contractor is liable for any injuries to that subcontractor’s employees. In that instance it does not matter how many employees the subcontractor has or how many employees the contractor normally has. However, if the contractor asks for and receives a certificate of insurance from the subcontractor prior to the subcontractor beginning work, the contractor will not be liable.

With the Industrial Commission assessing penalties to employers who do not have workers’ compensation insurance regardless of whether or not there has been an accident it is important to check and make sure your business does not fall under either of the above categories. If it does, get workers’ compensation insurance.