Utah workers' compensation insurance

Utah state law mandates strict workers’ compensation insurance coverage for employers. With just a few exceptions, every Utah company that hires employees must provide workers’ compensation insurance.

Once you hire even one employee, you must provide workers’ comp insurance to that worker and all future employees. Only a few categories of workers are exempt:

• Some agricultural employees
• Casual or domestic employees
• Some real estate and insurance brokers

A business can elect to exclude some or all of its corporate officers and directors from workers’ comp insurance. However, it must first file notice with its workers’ comp insurer and file for an exemption with the State of Utah Labor Commission.

Most employers must provide workers’ comp insurance in Utah. However, business owners with no employees, such as sole proprietors, independent contractors, partnerships, and limited liability companies (LLCs), aren’t required to purchase this policy.

Even when it's not required, buying workers' comp coverage is a smart financial move. Your health insurance company might deny a claim for a workplace injury, which could leave you responsible for costly medical bills.

Additionally, here's what your workers' comp insurance policy won't cover:

• Injuries caused by intoxication, drugs, or company policy violations
• Injuries claimed after a firing or layoff
• Wages for a replacement worker
• Occupational Safety and Health Administration (OSHA) fines

Insurance providers use a specific formula for calculating workers' comp premiums: Classification rate x Experience modification rate x (Annual payroll / $100).

To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.

In some cases, Utah employers can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of an estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.

A ghost policy is a cheap option in some states, although it is not permitted in Utah. A ghost policy is a workers' comp policy in name only. It provides no protection or medical benefits, but can fulfill contractual requirements for a workers' comp certificate at a reduced price.

Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.

When a worker is injured on the job, workers' comp covers the cost of their medical bills. This business insurance also provides indemnity benefits to help cover the employee's loss of income. In the event of permanent impairment or disability, workers' comp can provide disability compensation for the life of the worker.

Workers' compensation benefits for injured employees in Utah cover:

• Medical expenses for reasonable and necessary medical care related to the injury
• Temporary partial disability benefits
• Temporary total disability benefits
• Permanent partial disability benefits
• Permanent total disability benefits
• Death benefits for a surviving spouse or dependents

Policies usually include employer's liability insurance, which can help cover legal expenses if an employee blames their employer for an injury. The exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer once they accept workers' comp benefits.

For details, visit the Industrial Accidents Division within the Utah Labor Commission.

The penalties for violating Utah’s workers’ compensation statute can be severe:

• A penalty of at least $1,000
• A legal injunction against doing business in the state
• Loss of the so-called “exclusive remedy,” which protects employers from getting sued for workers’ comp benefits

If one of your employees dies as a result of a work-related injury or industrial accident, the person’s dependents are entitled to receive death benefits. These include payments to cover burial and funeral expenses.

Under the Utah Workers' Compensation Act, survivors are entitled to weekly income benefits. This amount, based on whether the deceased worker had dependents and how many, is calculated on the basis of 67% of the employee’s average gross weekly pay.

A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that terminates a workers’ compensation claim. This benefits both the employee and the employer.

The Utah Labor Commission allows settlements of workers’ comp claims. Utah law requires the commission to approve these agreements, even though all parties have indicated their desire to settle.

There are two kinds of settlement agreements in Utah:

Compromise settlements are used when the parties disagree on whether the sick or injured worker is entitled to receive a workers’ comp benefit.

Commutation settlements are used when everyone agrees the worker should get a workers’ comp benefit.

If you are ready to buy a workers' compensation policy, start a free application with Insureon to compare quotes from top-rated insurance carriers. A licensed insurance agent will help answer your questions and explain your coverage options.

Once you find the right policy, you can usually begin coverage and get your certificate of insurance in less than 24 hours.