Workman’s Comp Insurance, known today as “Workers’ Compensation Insurance,” is one of the few small business insurance policies regulated at the state level. Though where you live determines your insurance obligations, most states require employers to carry the coverage as soon as they hire their first employee. You can look up your state’s laws in our guide, “Workers’ Compensation Insurance Laws by State,” or consult the list below.
When to Purchase Workers’ Compensation Coverage: Details
As you may already know, Workers’ Comp ensures your business can take responsibility for the occupational injuries its employees suffer. This small business insurance policy can pay for employee medical expenses, replacement wages, and your legal expenses if your work-injured employee decides to forgo benefits and sue your business instead.
While it’s a good idea to carry coverage regardless of your state laws, you should still know your legal obligations so you fully comply. Each state has its own stipulations governing Workman’s Comp coverage.
Some states only require coverage when your business has a certain number of employees. In Florida, for example, the mandate doesn’t kick in until you have four or more employees, so long as you don’t work in construction. Other states, such as West Virginia, require you to have adequate Workers’ Comp coverage even if you only have one employee.
Your industry may also affect your need for insurance (e.g., roofers in California must carry Workers’ Compensation even if they don’t have any employees).
To learn what your state has on the books, click the appropriate link below: