Workers Compensation
Workers’ Compensation provides employees (and sometimes company principles) with medical and lost wages coverage if they’re injured while on the job and can’t return to work. In most states, companies with employees are required to carry Workers’ Compensation coverage.
What Happens If I Don’t Have Workers Comp Coverage But I Have Employees
The state may send you a ‘Stop Work Order’ if they discover you’re not covering employees with an active workers compensation policy. You will not be able to reopen until coverage is in place and you could be fined for each day coverage is not in place.
Massachusetts, as well as many other states, require business owners to provide coverage for its employees. The Department of Industrial Accidents works with several reporting agencies and resources to try and make sure business owners abide by this rule.
As The Business Owner Am I Required To Cover Myself?
It depends. If you are hired by another company as a subcontractor and you personally provide the labor, or service then you may need to. Check with the company who hired you to see if they plan to provide coverage for you under their workers comp policy. If not, you need to be covered under your own policy. A homeowner may also ask for proof of workers’ compensation coverage. When they do they are asking if you, or your workers who may do the work are covered.
In the end, if you are simply managing your business, directing employees to projects and not actually doing the work or providing the service personally then you would not have to include yourself on the policy.
Maximum Payroll Limits Business Owner or Officer Your Premium Cost Is Limited
At least in Massachusetts, the state sets maximum payroll limits company officers, and sole proprietors have to pay to cover themselves on their workers compensation policy. Basically, as a business owner or officer no matter what you earn you will be charged up to a certain amount of earnings.
Massachusetts Premium Caps for sole proprietors and corporate officers.
Do Subcontractors Count As Employees?
If you hire subcontractors instead of having full or part-time employees you may still be required to carry workers’ compensation for them. As a business owner hiring subcontractors coverage for workers compensation has to be provided somewhere. If you do not provide coverage then you need to make sure the subcontractor provides there own workers compensation policy. What’s even more important, make sure the subcontractor is covered under there own policy if they are doing the work.
If workers’ compensation coverage is found to not be in place either with you, or the subcontractor the state will look to you to pay the cost of coverage!
Can I Insure Volunteers Under My Workers Compensation Policy?
At least in Massachusetts, businesses and even non-profits are not required to cover volunteers. however, there is an exception for student internship programs recognized by the state. If you have agreed to employ a student(s) under a formal educational internship program you may be required to cover those interns; whether or not you pay them. contact your agent, or give us a call if you have further questions regarding volunteers and interns.
I Hired In-Home Care For My Elderly Mother- Am I Required to Buy a Workers Comp Policy?
As in-home care providers is becoming more common some states are cracking down on workers compensation coverage for household help such as in-home care providers and nanny’s. First, we recommend checking with the in-home service provider to see if they provide a workers comp plan you can buy as part of their service. If not, give your agent a call, or us to find out what you need to do. In most instances the cost for this policy is minimal.