Virginia businesses with three or more employees are required to carry workers’ compensation insurance. Employers that provide workers’ comp coverage are shielded against civil suits from injured or sick employees.
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:
Even when it's not required, buying workers' compensation is a smart financial move. Your health insurance company might deny a claim for an injury related to your work, which could leave you responsible for costly medical bills. That's why someone who's self-employed might choose to buy workers' comp.
As for when it's required, it depends on your ownership status. 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 (VWC).
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 in Virginia 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:
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, small business owners 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 estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.
Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.
Employees who suffer a workplace injury or occupational disease are eligible for benefits under the Virginia Workers' Compensation Act.
Workers' comp pays any medical expenses related to work-related injuries. It also covers part of the wages lost while the employee recovers. Medical treatment must be provided by an authorized doctor for the employee to receive benefits.
Workers' compensation benefits in Virginia include:
Policies usually include employer's liability insurance, which helps 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 Virginia Workers' Compensation Commission's Injured Worker's Benefits Guide.
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.
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 death benefits under state law.
The injured worker’s eligible dependents may receive weekly payments equal to two-thirds of the employee's average weekly wages for up to 500 weeks from the date of injury. Coverage also includes up to $10,000 for burial expenses and up to $1,000 for transportation expenses.
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's workers' compensation system, many 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 policy options for your Virginia business, start a free online application today to compare quotes from top-rated insurance carriers.