When Do You Need Workers Comp Insurance?

When Do You Need Workers Comp Insurance?

workers comp insurance

While there are different requirements and exclusions from state to state, most locations do require companies to carry workers comp insurance from the moment they have their first employee. This is an important distinction, however. The definition of an employee varies from location to location, and finding a partner who can provide you with the right advice about that definition, as well as coverage that fits the requirements of your location, is the key to your company remaining in compliance.

Working, But Not an Employee

There are several kinds of on-site workers who might not count as employees, but whose role in certain jurisdictions is uncertain. These may include

Partners working for profit share instead of wages
Temporary workers provided by services
Subcontractors representatives and workers
Friends and family members volunteering during busy moments

To make sure that you are covered no matter what happens, it is important to find a program suited to the size of your business, because some of these designations are uncommon at larger companies, and you want advice that fits your actual operations.

Employed, but Not Covered

Some states also have provisions for classes of employees that do not need coverage. For example, Nebraska does not require coverage for employees that work at a nonprofit if their take-home pay is under $1,000 per year. Making sure you have the coverage you need without overpaying is what specialized small account workers comp insurance programs are made for.