Workers’ Compensation is a confusing monster. There are state and federal regulations to contend with and no one really knows what they need. Then there is price to deal with and annual audits… We are here to help clear some of these issues up for you, offer suggestions, and a solution!
What is Workers’ Compensation?
Just to be clear, lets discuss what Workers’ Compensation is – it’s a type of insurance that provides coverage to employees (or an employee’s family) due to a job-related injury. Benefits are the same for all individuals and include lost wages, death benefits, and retraining due to injury. This coverage is purchased by owners and officers of the company as it is their responsibility to protect their employees.
Coverage for Officers and Owners
Officers can elect to be included or excluded from coverage. Depending on the state statute, an inclusion or exclusion form may be required. Minimum payroll amounts for owners vary by state and are mandatory.
It is important to note that most health care providers will not cover an injury sustained while on-the-job. Depending on how much coaching they do on the floor, they may consider including themselves.
Those are the basics, but you can read more about the ins and outs of owner coverage by reading our other blog post here.
Coverage for Employees and Contractors
Workers’ Compensation coverage can be extended to no only your employees, but to your independent contractors as well as long as they are performing work for your business. Also, some states require that you contractors be included in coverage, but each state has their own guidelines, so it is important to research who you are required to purchase coverage for.
We wrote an in depth blog post about how best to classify your employees and contractors which you are welcome to read here.
Does your business need this coverage?
The short answer is yes, you should purchase coverage for anyone that works for your business. This help mitigate any liability should an injury happen while working. If you are keen to abide by your state’s requirements, then this is a very difficult question to answer as it is dependent upon factors such as:
- What state your business resides in
- How many employees or contractors you have
- How you classify your employees and/or contractors
We highly recommend either speaking with your local broker to discuss your state guidelines or look them up yourself. Your state’s labor website should outline their requirements, if any.
We at NEXOFit would be happy to assist you in determining your states’ requirements or direct you to the best place to find out more. You can reach us at (310) 937-2007 or via email at [email protected].