Most Virginia employers are required to carry workers’ compensation insurance. Employers that provide workers’ comp coverage are shielded against civil suits from injured or sick employees.
Virginia enforces strict workers’ compensation insurance rules on employers. Any firm that employs three or more workers must carry workers’ comp insurance. Coverage is mandatory, with no waivers or exemptions permitted.
In addition, companies that hire contractors to perform regular job tasks or to fulfill a contract must count those individuals when determining how many employees they have for workers’ comp purposes.
The state considers all of the following to be employees for workers’ comp purposes:
It depends on your ownership status. For example, sole proprietors who have no employees and who don’t use subcontractors do not need to buy workers’ compensation insurance for themselves. Sole proprietors, unlike in many other states, don’t need to file an exemption or waiver form with the Virginia Workers’ Compensation Commission.
If you’re an executive or corporate officer at your firm, the state considers you to be an employee for workers’ comp purposes. However, it gives you the right to “reject” insurance coverage. To elect this provision, you must:
The same rules apply if you’re an LLC member, but they don’t apply if you’re an executive non-compensated officer of a tax-exempt 501(c)(3) corporation.
Independent contractors are not required to have workers’ comp coverage. However, if the state determines the employer / independent contractor work relationship is actually an employer / employee one, your business could face penalties and you would be required to provide coverage. Indicators that a contractor is actually an employee include the employer:
Virginia business owners can compare quotes and purchase a policy from private insurance companies. (Insureon offers this service with its online insurance marketplace.)
Virginia employers who qualify can self-insure their workers’ compensation claims. This means they’ll pay for their own workers’ comp claims rather than submit them to an insurance company. To qualify for self-insured status, they must:
Other ways to obtain workers’ comp insurance in Virginia:
If you’re unable to purchase workers’ comp insurance through any of the above means because of your firm’s high-risk status, you can purchase coverage from the Virginia Assigned Risk Market. Administered by the National Council on Compensation Insurance (NCCI), it is the state’s workers’ comp insurer of last resort.
The estimated workers’ comp expense for Virginia employers is $0.76 per $100 in covered payroll, according to the National Academy of Social Insurance [PDF].
Violating the Virginia workers’ compensation statute is a serious offense. If you fail to comply, you may be assessed a civil penalty of $250 for each day you fail to maintain insurance, up to a maximum civil penalty of $50,000.
The spouse, children, and other dependents of a Virginia employee who died as a result of a job-related injury or illness may qualify for a death benefit under state law.
The injured worker’s eligible dependents may receive an award covering all medical, surgical, and hospital services and supplies (if any); burial expenses no more than $10,000; and transportation expenses no more than $1,000.
A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that resolves a workers’ compensation claim. This benefits both the employee and the employer.
In Virginia, many workers’ comp claims end in settlements. This means the parties in the claim – the injured employee, the company, and the insurer – agree on a lump-sum payment in return for the employee (or the employee’s survivors) agreeing to forfeit future benefits.
The settlement agreement, which must be a written document signed by the injured or ill worker or survivors, a representative of the employer, and the insurance company, must be filed with the Virginia Workers’ Compensation Division and approved by one of its judges. The settlement application must include:
In Virginia, workers’ comp settlements do not require an official hearing before an administrative judge.
In Virginia, employees with injuries must file a workers’ comp claim no later than two years after the injury. The state will not offer an extension if you discover an injury or illness after the claim deadline.
If you are ready to explore workers’ comp insurance options for your Virginia business, start a free online application today to compare quotes from top-rated carriers.