Frequently asked questions about workers’ compensation insurance

Each state sets its own regulations for workers’ comp. Most states require it as soon as you hire your first employee. Texas and South Dakota are the only states where it’s optional for employers to purchase workers’ comp.

In addition to differences across states, the construction industry often has separate rules from other industries. Visit our workers’ compensation state laws page to learn about the requirements in your state.

Workers’ compensation insurance helps pay for medical expenses and partial lost wages resulting from a work-related injury or illness. In the event of a fatality, it also pays death benefits.

Read more about workers’ compensation insurance coverage, as well as the policy's limits.

The employer’s liability section of workers’ comp protects the employer from lawsuits related to an injury, such as claims that the employer’s negligence caused the injury.

Your workers’ compensation insurance includes employer’s liability insurance – unless your business is located in one of the four monopolistic workers' comp states and must purchase coverage through a state fund. If so, you can add stop gap coverage as an endorsement from a private insurer.

Insureon is can help you get quotes from leading insurance companies in the U.S.

Workers’ compensation insurance is typically not required for sole proprietors and independent contractors, outside of hazardous professions such as roofing. However, in certain situations someone who is self-employed with no employees or a 1099 contractor might want to purchase a policy.

If you're injured on the job, your health insurance provider might deny a claim, so it's worth buying this coverage to protect against unexpected medical costs. Clients might also require you to carry it.

As many sole proprietors and independent contractors are exempt from workers' comp requirements in several states, a workers' comp ghost policy may also be an effective alternative option. It can help self-employed individuals provide a workers' compensation certificate of insurance (COI) without having to pay for a full policy.

Read more about workers’ comp insurance for sole proprietors and independent contractors.

If your limited liability company (LLC) has any employees, it will need a workers’ compensation insurance policy. If your LLC doesn’t have employees, your need for workers’ comp depends on how many executive officers or members you have and other factors related to your business.

Read more about workers’ comp insurance for limited liability companies.

The cost of workers’ compensation depends in part on the type of work done by your employees. That means you must make sure your employees are classified correctly to avoid lawsuits and penalties. Each employee must be assigned a workers’ compensation class code that accurately reflects their work environment and level of risk.

Our online application for workers’ compensation insurance takes just a few minutes to complete. It requires basic information about your business, including where it’s located, the number of employees, and your estimated annual payroll.

In most cases, we’ll deliver quotes from top-rated insurance companies as soon as you finish the application. Look them over and pick the policy that works best for you. A licensed Insureon agent is available to assist you throughout the process.

Once you purchase a policy, you can access your account and obtain a certificate of insurance, which is a formal proof-of-insurance document.

Insureon specializes in small business insurance for numerous industries. Our insurance specialists have helped more than 400,000 businesses in multiple industries, including:

There are strategies you can use to save on your workers' compensation premium, such as improving workplace safety and paying your premium annually.

For some small businesses, it may be more cost effective to get a pay-as-you-go workers' comp policy. This type of policy offers flexible premiums that change throughout the year, depending on changes to your number of employees and your payroll data throughout a 12-month span.

In addition, some business owners may be eligible for a minimum premium workers' compensation policy, which sets your premium charges at the minimum premium (i.e., the smallest amount of money that an insurance company will sell to a business). Small businesses that benefit from this type of policy often have few risks and a small number of employees.

When an employee is injured at work, your first responsibility is ensuring the safety of your workers. Your immediate response should be to assist the injured, get workers to a safe area, and contact emergency medical services if anything more than basic first-aid is needed. When the situation is under control, talk to witnesses and take notes to document what happened.

When you or one of your employees is injured, you must:

• Give the employee the appropriate paperwork and guidance
• File the claim with the insurer
• Comply with state law for reporting work injuries

To make a workers' compensation claim, the employee must report the injury within a certain time frame, which varies depending on your state. The employer should provide the employee with appropriate paperwork, including a claims form, and submit it to the insurance carrier.

In some states, incidents must be reported to the state workers’ comp board. The employee may also need to seek medical treatment from a doctor approved by the board. Your agent can guide you through the process and provide answers to any additional questions.

If the injured employee is not satisfied with the insurance company’s offer on a claim, the employee can pursue a settlement with the help of an attorney. The employee, the attorney, and the insurance company will negotiate to find an amount that satisfies all parties. The employer should stay involved and informed to reduce the chance of a lawsuit.

If you hire more employees, your workers’ compensation premium will change accordingly. It’s easy to add insurance at a later date. Your insurance agent can adjust the coverage amount on your policy, and provide assistance if you need to purchase additional policies.

If you cancel your policy early, you run the risk of paying more for coverage down the road. Insurance companies typically charge higher rates to businesses that start and stop coverage. You also leave your business exposed to potential risk if you cancel your coverage. Because workers’ comp is often required by state law, you could face fines or even jail time depending on the laws in your state.

Workers’ compensation and general liability insurance can both pay for medical expenses related to injuries at your business. However, general liability does not cover employee injuries. To extend this protection to your employees, you will need to purchase workers' comp insurance, which covers the costs associated with employee injuries or illnesses. Depending on which state your business is located in, you may be legally required to purchase workers’ comp coverage.