Virginia workers' compensation insurance

Virginia enforces strict workers’ compensation insurance rules on employers. Any firm with three or more part-time or full-time employees must carry workers’ comp insurance.

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 Virginia workers' compensation law has a broad definition of employee. Coverage is mandatory for employees, with no waivers or exemptions permitted.

The state considers all of the following to be employees for workers’ comp purposes:

• Full-time and part-time workers
• Corporate officers and managers of limited liability companies (LLCs), even if they’re not performing job duties for pay
• Family members that work for the business
• Employees who work on a temporary or seasonal basis
• Immigrants or workers who are being trained
• Workers younger than age 18
• Employees working for nonprofit organizations such as churches, charities, and others

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. Unlike in many other states, they 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:

• Have valid workers’ comp coverage for your firm’s other employees
• File a Rejection of Coverage form [PDF] with the Virginia Workers’ Compensation Commission
• File a copy of the form with your insurance company

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:

• Controlling the work to be performed
• Being able to hire the person doing the work
• Being able to fire that person
• Paying wages to the person who completes the work

Additionally, here's what your workers' comp 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:

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, Virginia 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, including Virginia. 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.

Employees who suffer a workplace injury or occupational disease are eligible for benefits under the Virginia Workers' Compensation Act.

Workers' comp pays for medical expenses due to work-related injuries. It also covers wage loss while the employee recovers. Medical treatment must be provided by an authorized doctor for the employee to receive benefits.

Workers' compensation benefits in the Commonwealth of Virginia include:

• Medical benefits that cover the cost of medical care for on-the-job injuries
• Temporary total disability benefits
• Temporary partial disability benefits
• Permanent partial disability benefits
• Permanent total disability benefits
• Death benefits for fatalities from work accidents

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.

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, a workers' compensation case often ends in a settlement. 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:

• A petition describing the terms of the deal
• A notarized affidavit showing that the employee (or survivors) understand the settlement terms
• A medical statement summarizing the employee’s current condition
• A statement of the employee’s attorney fees
• A proposed settlement order

Virginia workers’ comp settlements do not require an official hearing before an administrative judge.

In accordance with Virginia's workers' compensation system, 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 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.