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Workers’ Compensation

When do I need to buy workers’ compensation?

In most states, workers’ compensation is required when you have one or more employees. Usually, the state penalties for employers who do not purchase workers’ compensation are very stiff. There are a few states that do not require employers to carry workers’ compensation coverage, however.

Where do I buy workers’ compensation?

Almost all states are “open market” states, meaning the coverage is underwritten by private insurers. Some states are “closed” or “monopolistic” states, meaning the coverage is underwritten by a state-sponsored fund (ND, OH, WA, WV, WY). In states that are open, rates can vary between insurance carriers depending on the type of business the carrier is attempting to attract. In an open market, the rates for workers’ compensation insurance can be competitive.

How much does workers’ compensation cost?

Workers’ compensation pricing is based upon your employee payroll, the number and job classification of the employees, the classification of your business and your past loss experience. The employer pays for the cost of workers’ compensation insurance.

What does workers’ compensation do?

Workers’ compensation pays for the rehabilitation, recovery or medical bills of employees’ work-related injuries, as well as lost time when they are off work due to a work-related injury. Workers’ compensation is not a substitute for health or medical insurance, since employees are only covered for on-the-job injuries.

I subcontract work to other contractors, but I have no employees — just my partner (half-owner). Do we need workers’ compensation on ourselves?

Yes and no. The contractor to which you subcontract is required to have proof of workers’ compensation for all workers (including you) in case a claim is submitted. However, your contract for subcontract work and proof of sufficient liability coverage may suffice as a substitute to carrying workers’ compensation. The contract should include the facts that you have no employees, you are sole proprietors and the fact that it is a valid sub-contract. Contact one of our licensed insurance professionals to help you select the proper coverage.

Does business insurance have to be bundled in a package including workers’ compensation? Where can I find a list of insurance companies that offer insurance for my business?

Some insurers bundle workers’ compensation with smaller policies such as a Business Owners/Package Policy (BOP) while other insurers write workers’ compensation separately or on a “monoline” basis. Our licensed insurance professionals can help you determine the best means to purchase these coverages. Finally, please keep in mind that the insurance companies will factor your type of business, payroll and past history of claims into consideration when calculating the cost of your coverages.

Premium Payments

Do I need to pay the entire premium up front?

Not usually. Depending on your premium size, most insurance carriers allow different payment plans. The company will bill you directly and give you the payment options at that time. Most are either 25% down & 8-9 payments, or a straight monthly billing with 12 equal installments.


What if I need to report a claim in the middle of the night?

Most insurance carriers now have staffed 24-hour claim centers to guide you through a claim. We will provide you with their toll-free telephone numbers for reporting your claims.