What is Workers Compensation Insurance? Do I Need Coverage?

You need to buy a workers compensation policy if you plan to hire one or more employees when you start a business. This type of policy replaces all or part of a worker's wages lost and accompanying medical expenses incurred because of a job-related injury.

Workers compensation insurance laws and codes differ from state to state so you need to check with a qualified insurance agent or your lawyer for the rules in force in your area.In most areas, you have a legal obligation to carry workers compensation insurance.

You do not have a legal obligation to purchase most or all of the other insurance types discussed in this section. Workers comp, as it is often called, is not a substitute for health insurance because it only covers work-related injuries. If you fail to carry this coverage, you are subject to severe penalties. If you do not have this coverage and a worker is injured, you are subject to criminal penalties that can land you in jail.

As mentioned, all 50 states have different requirements for workers compensation insurance, so you need to check on the requirements in your area. Some states set the rates and operate a state administered fund of workers compensation insurance. These states include North Dakota, Ohio, Washington and Wyoming.

Other states allow private insurers to provide workers compensation insurance subject to criteria developed by the states. These states include: California, Delaware, District of Columbia, Indiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina and Wisconsin.

Some states allow private insurers but the systems are managed and rated by the National Council on Compensation Insurance (NCCI). These include: Alabama, Alaska, Arkansas, Arizona, Colorado, Connecticut, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia and West Virginia.

Texas allows businesses to operate without workers compensation insurance.

When you start a business, here are other types of business insurance to discuss with a qualified professional: accidental death and dismemberment, advertisers personal injury, bodily injury liability, business continuation coverage/buy-sell planning, business interruption insurance, business owners policy (BOP) , commercial automobile insurance, comprehensive general liability (CGL) , crime coverage, cyber coverage, directors and officers, disability insurance, employment practice liability, fiduciary bond, fiduciary liability, fire legal liability, group life insurance, group retiree health benefits, group travel insurance, key person insurance, medical payments, product and completed operations exposures, professional liability (errors and omissions) coverage, property damage liability, property insurance (repair and replacement), umbrella liability.

Here are links to state workers compensation insurance rules:

Alabama (AL), Workers Comp: Alabama workers comp info

Alaska (AK), Workers Comp: Alaska workers comp info

Arizona (AZ), Workers Comp: Arizona workers comp info

Arkansas (AR), Workers' Comp: Arkansas workers comp info

California (CA), Workers Comp: California workers comp info

Colorado (CO), Workers Comp: Colorado workers comp info

Connecticut (CT), Workers Comp: Connecticut workers comp info

Delaware (DE), Workers Comp: Delaware workers comp info

District of Columbia (DC), Workers Comp: District of Columbia workers comp info

Florida (FL), Workers Comp: Florida workers comp info

Georgia (GA), Workers Comp: Georgia workers comp info

Hawaii (HA), Workers Comp: Hawaii state workers comp info

Idaho (ID), Workers Comp: Idaho workers comp info

Illinois (IL), Workers Comp: Illinois state workers comp info

Indiana (IN), Workers Comp: Indiana workers comp info

Iowa (IA), Workers Comp: Iowa workers comp info

Kansas (KS), Workers Comp: Kansas workers comp info

Kentucky (KY), Workers Comp: Kentucky workers comp info

Louisiana (LA), Workers Comp: Louisiana state workers comp info

Maine (ME), Workers Comp: Maine state workers comp info

Maryland (MD), Workers Comp: Maryland state workers comp info

Massachusetts (MA), Workers Comp: Maryland workers comp info

Michigan (MI), Workers Comp: Michigan workers comp info

Minnesota (MN), Workers Comp: Minnesota workers comp info

Mississippi (MS), Workers Comp: Mississippi workers comp info

Missouri (MO), Workers Comp: Missouri workers comp info

Montana (MT) Workers Comp: Montana workers comp info

Nebraska (NE), Workers Comp: Nebraska workers comp info

Nevada (NV), Workers Comp: Nevada workers comp info

New Hampshire (NH), Workers Comp: New Hampshire workers comp info

New Jersey (NJ), Workers Comp: New Jersey workers comp info

New Mexico (NM), Workers Comp: New Mexico workers comp info

New York (NY), Workers Comp: New York workers comp info

North Carolina (NC), Workers Comp: North Carolina workers comp info

North Dakota (ND), Workers Comp: North Dakota workers comp info

Ohio (OH), Workers Comp: Ohio workers comp info

Oklahoma (OK), Workers Comp: Oklahoma workers comp info

Oregon, Workers Comp: Oregon workers comp info

Pennsylvania, Workers Comp: Pennsylvania workers comp info

Rhode Island, Workers Comp: Rhode Island workers comp info

South Carolina, Workers Comp:South Carolina workers comp info

South Dakota, Workers Comp: South Dakota workers comp info

Tennessee, Workers Comp: Tennessee workers comp info

Texas, Workers Comp: Texas workers comp info

Utah, State of Workers Comp: Utah workers comp info

Vermont, State Workers Comp: Vermont workers comp info

Virginia, Workers Comp: Virginia workers comp info

Washington, Workers Comp: Washington workers comp info

West Virginia, Workers Comp: West Virginia workers comp info

Wisconsin, Workers Comp: Wisconsin workers comp info

Wyoming, Workers Comp: Wyoming workers comp info

Links to Insurance Articles in This Section

Workers Compensation Insurance

Home Business Insurance

Comprehensive General Liability (CGL)

Comprehensive General Liability (CGL)

Professional Liability Insurance

Product Liability Insurance

Product Liability Insurance for Small Business

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