Washington workers' compensation insurance

Washington is one of four monopolistic states, which also include Ohio, Wyoming, and North Dakota. A monopolistic state is one where you can only purchase workers’ compensation insurance from a state fund, and not through a private insurer. In Washington state, workers’ comp is administered through the Washington State Department of Labor & Industries (L&I).

Each business must have a business license and an account with L&I to purchase workers’ comp insurance through the fund. L&I will make classifications based on its own system, which determines coverage rates.

If a business or employer has $25 million or more in assets and an accident-prevention program, it might be permitted to get self-insurance. Every other business with employees must purchase workers' comp through the state fund.

Small businesses can still purchase other insurance policies through private insurers, including common coverages such as general liability insurance, professional liability insurance (also called errors and omissions insurance or E&O), and cyber insurance.

Sole proprietors and independent contractors should strongly consider buying workers’ compensation insurance, even though it's only required for employees.

Your personal health insurance company might deny a claim if the injury is related to your job. That would leave you paying medical bills out of pocket, which could be even harder if you're out of work while recovering.

Workers' compensation would pay your medical bills, and also supply partial wages for the time you lost while unable to work. For workplace accidents that result in a fatality, it provides death benefits for the employee's dependents.

Workers’ compensation insurance is required in Washington state for any business with one or more employees. If you have any employees – even independent contractors – you might be required to buy coverage.

Washington state law requires workers’ compensation insurance for both full- and part-time employees.

However, there are circumstances in which a worker would be exempt from the state's workers’ compensation requirements:

• Domestic workers, when there is only one per home, and the employee doesn’t work more than 40 hours per week
• Gardening, maintenance, or repair workers at private homes
• Musicians and entertainers at specific events
• A child under 18 who is employed by a parent for farm work
• Cosmetologists and barbers who rent or lease their space

For details and a full list of exemptions, check the DLI Employers' Guide to Workers' Compensation [PDF].

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.

Workers’ compensation benefits can cover medical and hospital expenses resulting from a workplace injury. It can also cover partial wage replacement if the employee is unable to work, or is delegated to light duty because of an impairment.

Workers’ compensation insurance in Washington state can include coverage for:

• Medical benefits to pay for prescriptions, surgery, and other medical care
• Some travel for medical procedures or appointments
• Reimbursement for lost or damaged property
• Permanent partial disability and permanent total disability
• Job retraining and assistance finding work after an injury
• Death benefits for fatal incidents

Injured employees can visit a medical provider of their choice for emergency treatment, but must see an authorized provider for follow-up care.

Workers' compensation insurance usually includes employer's liability insurance, but that's not the case when it's purchased through a state fund.

Washington employers who want this coverage, which protects against employee lawsuits over injuries, must purchase it as stop-gap coverage. They can usually add it to their general liability policy purchased through a private insurer.

General liability insurance and other small business insurance policies are available at competitive rates in the open market in Washington. Start a free online application with Insureon to compare quotes from leading insurers today.

An eligible survivor can receive a one-time benefit plus a monthly survivor’s pension if a family member dies as a result of a work-related injury or illness. The spouse of the deceased worker is automatically eligible for death benefits. The worker’s children are eligible if they are legally dependent.

Washington's workers’ compensation system also covers funeral benefits up to two times the state's average monthly wage.

Workers’ compensation settlements are agreements between the injured worker, employer, and the insurer to resolve a claim. Most workers’ comp claims in Washington become a structured settlement, which means the injured worker receives periodic payments in installments over time.

Acceptance of a structured settlement would prevent the worker from claiming future benefits for wage loss and permanent disability, but it would not prevent claims for future medical treatment. If a new injury or illness related to the original claim is diagnosed or discovered later, the claim could be reopened.

In Washington state, the workers’ compensation statute of limitations is one year from the date of injury. If the worker has an occupational disease, the statute of limitations is two years from the date it was discovered.

If you’re ready to explore commercial insurance coverage for your Washington business, start a free online application with Insureon today to compare quotes from top-rated insurers.