Maryland workers’ compensation insurance

Every business with one or more employees is required to carry workers’ compensation insurance in Maryland. That includes both full-time and part-time employees.

Workers' comp covers medical costs and provides disability benefits for workplace injuries and illnesses. Policies usually include employer's liability insurance, which can help cover legal expenses if an employee sues their employer over a work injury.

Agricultural employers that have fewer than three employees or an annual payroll that totals less than $15,000 are exempt from Maryland's workers' comp requirement.

A business owner who is a sole proprietor, a partner in a business partnership, or an independent contractor does not need to be covered by Maryland workers’ compensation insurance. However, they can still choose to buy this coverage to protect against the high cost of medical expenses.

Yes, any worker who is on the regular payroll of a Maryland business at any time counts as an employee and must be covered by workers' compensation. That includes seasonal workers, part-time workers, and full-time workers.

However, seasonal and part-time workers may receive a lower amount for workers' comp wage replacements, as this amount is based on an employee's average weekly wages.

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 the policyholder make payments based on their 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 it is not permitted in Maryland. 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.

In Maryland, an employee who suffers an on-the-job injury can receive financial compensation for medical bills and also part of the wages lost during recovery.

The harm must have been caused by "accidental personal injury arising out of and in the course of employment," according to the Maryland Workers' Compensation Commission (WCC). Occupational diseases and job-related fatalities may also be covered.

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

The state of Maryland requires coverage to include workers' compensation benefits for:

• Medical/hospitalization benefits
• Temporary disability benefits
• Permanent disability benefits
• Wage reimbursement benefits
• Vocational rehabilitation benefits
• Death and funeral benefits

The Maryland WCC regulates workers’ comp insurance in the state, and manages claims and enforcement. You can find more information on their workers' comp FAQ page.

Maryland employers that fail to maintain the required workers’ compensation coverage can be fined up to $10,000. If the company is a corporation, the officers would bear personal liability for this cost.

If an employer deducts any part of the workers’ compensation costs from employees’ wages, the employer can be found guilty of a misdemeanor.

If an employee dies as a result of a work-related injury or illness, death benefits can be awarded to surviving dependents.

In some states, only certain family members like spouses and children can claim death benefits. In Maryland, any family member who was financially dependent on the deceased worker may claim benefits.

Usually, a surviving dependent would receive two-thirds of the deceased worker’s average weekly wage up to the legal maximum. However, this depends on how much the deceased worker contributed to the family income. In other words, if the person was responsible for 60% of the household expenses, the dependents can receive 60% of two-thirds of the average weekly wage.

Death benefits are available to survivors for a minimum of five years and a maximum of 12 years, depending on the circumstances. Maryland workers’ compensation also covers reasonable funeral expenses up to $7,000.

A workers’ compensation settlement is an agreement between the parties that will resolve your workers’ compensation claim. This benefits both the employee and the employer. A settlement in a workers’ compensation claim is a full and final resolution.

An injured worker is never required to come to a settlement. However, if the worker has reached maximum medical improvement or will not require additional medical treatment, they can settle for a lump sum in exchange for closing the claim.

All workers’ compensation settlements must be approved by the Maryland Workers’ Compensation Commission.

An injured worker must notify the employer within 10 days of the accidental injury. Workers' comp claims should be filed with the WCC within 60 days of the injury or the discovery of a work-related illness.

The statute of limitations for a Maryland workers’ compensation claim is two years from the date of the accident that caused the injury. The WCC provides an employee claim form and instructions for claimants.

Consider consulting an experienced workers' compensation attorney for legal advice about your claim or settlement.

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.