Workers’ compensation insurance protects your employees from financial loss due to injuries occurring at work. You know the value of having this coverage. Yet, there can be some gray areas to consider when it comes to defining who has coverage. State laws differ in some areas, so it is important to verify information with your agent. These guidelines can give you a place to start, though.
Who is Your Employee?
An employee is a person who works for your business. It seems like a straightforward question, but there are some areas that can be confusing.
Generally speaking, your state’s laws determine who an employee is. Most of the time, they will include:
• Those who work for you daily
• Leased employees
• Part-time employees
• Unpaid volunteers
• Borrowed employees
• Any type of day labor
In some situations, subcontractors may fall in this area, too. This is less common.
If you have an employee with a unique situation, be sure to talk to your workers’ compensation insurance agent about this employee, including what he or she does and how they work for you.
There Are Some Exceptions
Some states have exceptions in place for covering employees for workers’ compensation. For example, most states will state that independent contractors – those that you do not file taxes for—have no coverage under this policy.
Some states also limit some categories of workers from eligibility. This may include seasonal employees or domestic employees, for example. In some areas, agricultural workers may have less protection. This is only possible when the state’s laws allow for it. Other states only require businesses with certain numbers of employees (say five or more) to buy coverage.
Why It Is Best to Cover Them
If you have someone working for you, but you are not sure if they qualify for workers’ compensation insurance, talk to your agent about it. Discuss what your needs and concerns are. If the employee could have coverage, and has a claim to file, doing so may be a good thing. By providing your employees with access to coverage, you ensure they get the care they need. This may help you avoid a lawsuit. It can also help you reduce risks associated with losing the employee to a company with more protections.
There are limits in every situation. And, the terms of your workers’ compensation policy can play a role in this, too. It’s important to speak to your business insurance agent about any concerns you have about proper coverage for your team.