New York workers’ compensation insurance

If you are self-employed or the sole proprietor of a business, you're not required to buy workers' compensation for yourself.

However, it's still a good idea to purchase this coverage. If you suffer an on-the-job injury and you don't have workers' comp, you could end up paying for expensive medical bills out of pocket, as personal health insurance might not cover work injuries.

Workers' comp also pays for part of the wages you lose while unable to work, which could save your business if you're sidelined for a long time with an injury.

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, 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.

A ghost policy is a cheap option in some states, though not permitted in New York. A ghost policy is a workers' comp policy in name only. It provides no protection, 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.

Workers' compensation covers the cost of medical bills for employees who suffer a workplace injury or develop an occupational disease. It also provides disability benefits while employees are unable to work, typically two-thirds of their average weekly wage.

Most workers' compensation policies include employer's liability insurance, which helps cover legal defense costs if an employee blames their employer for an injury. However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer once they accept workers' comp benefits.

Workers' compensation benefits for injured employees in New York include:

• Medical benefits covering all medical expenses related to the injury
• Lost wage benefits for employees who are out of work for more than seven days
• Cash benefits for employees who suffer a loss of function or other permanent disability
• Related expenses, such as mileage reimbursement for travel to a doctor's office
• Death benefits for fatal incidents

It is an employee’s responsibility to inform the employer or supervisor when an injury or accident has occurred. The injured worker must seek treatment only from a healthcare provider that is authorized by the NY Workers’ Compensation Board (WCB), unless treatment is provided in an emergency situation.

Generally, an employer cannot direct employees to specific medical providers, unless the employer participates in a Preferred Provider Program or Alternative Dispute Resolution Program. The employer could recommend a provider, but the employee must also be informed of their right to select a provider of choice.

When the employer becomes aware of an injury that might be covered by workers’ compensation insurance, the employer should communicate with its insurance provider throughout the workers’ compensation claim process.

A minor injury that requires two or fewer first aid treatments and that causes the employee to return to work in one day or less could be compensated directly by the employer. Any other injury must be reported to the Board and the workers’ compensation insurance carrier within 10 days.

The New York State Workers’ Compensation Board regulates and enforces all workers’ compensation requirements in the state. New York requirements that are not followed can result in serious civil and criminal penalties.

Failure to secure coverage for five or fewer employees within a one-year period is a misdemeanor and is punishable by a fine of between $1,000 and $5,000. If the failure to secure coverage is for more than five employees, it becomes a felony punishable by a fine of between $5,000 and $50,000. If there is a subsequent conviction within five years for failure to secure coverage, the fine would be between $10,000 and $50,000 and could include other penalties and fines.

Failure to make a provision for payment of compensation for 10 days or more would leave the employer open to civil action by the board. The board could impose a penalty of up to $2,000 for each 10-day period of noncompliance or a sum up to twice the cost of compensation during that period.

Misrepresentation by an employer of the number of employees, classification, wages, and accidents is subject to criminal and civil prosecution. A business is required to maintain accurate records. If the employer intentionally understates or conceals payroll, conceals employee duties to avoid classification, or conceals other information, it could result in a fine of $2,000 for every 10-day period of noncompliance or twice the cost of compensation. If an employer is criminally convicted based on these charges, the fine would be $1,000 to $50,000.

Failure to maintain accurate payroll is also a criminal offense. If an employer does not keep accurate records about employee classifications, information about accidents, and wages, it can be found guilty of a misdemeanor and subject to a fine of between $5,000 and $10,000. If the employer has been convicted on this basis in the past, the conviction becomes a felony, and the fine would rise to $10,000 to $25,000. The civil penalty for these offenses is $1,000 per 10-day period of noncompliance or twice the cost of compensation for the employer’s payroll during the periods of time when the failure occurred.

When a person dies as a result of a work-related injury or illness, their dependents are entitled to receive workers’ compensation death benefits.

New York classifies a spouse and minor children as primary dependents. The surviving spouse would usually receive benefits for the remainder of their life, unless they remarry. If the spouse remarries, a lump sum equal to two years of benefits would be delivered. If there are no children, the spouse receives 66.67% of the deceased worker’s average weekly wage up to the statutory maximum.

If there are surviving children, the rate remains the same but the benefits are divided so that 36.6% of the weekly rate is given to the spouse, and the children equally split the remaining 30%. Children’s benefits end when they reach 18 years old, or 23 years old if they are full-time students. If there is not a surviving spouse or children, benefits could be awarded to the deceased worker’s parents or estate.

As part of workers’ compensation death benefits, New York also provides assistance for funeral expenses. However, the amount of funeral expense benefits in New York vary depending on where the deceased was a paid worker. For example, in the counties of the Bronx, Kings, Nassau, New York, Queens, Richmond, Rockland, and Westchester, New York assists with funeral expenses up to $12,500.

There are two ways for insurance companies and injured workers to reach workers’ compensation settlements in New York.

A stipulation agreement is when the injured worker and the insurance company can agree on the degree of disability and how much the worker will need in benefits. The benefits are disbursed to the employee on a set schedule. A stipulation agreement could be modified later if the worker’s condition worsens over time.

With a Section 32 settlement, both parties agree to close the claim in exchange for a lump sum payment. Once approved by the Board, the settlement is final, and the injured worker no longer has rights to modify the claim.

The workers’ compensation statute of limitations in New York is two years. That time begins either from the date of injury or the date that the claimant should have reasonably become aware of a work-related injury.

For example, if an employee falls and suffers a back injury while working on a structure in Manhattan, they might return to work immediately and not require medical treatment. However, if they experience back pain a few weeks later that is determined to be a result of the fall, they would have two years from that diagnosis to file a workers’ comp claim.

The statute of limitations for work-related hearing loss is slightly different. In that case, a worker cannot file a claim until 90 days after the loss occurs.

If you're 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.