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Return To: Workers Compensation Insurance – The Ultimate Guide

Not having workers’ compensation insurance puts your business and your employees’ lives at risk. In 2019, the leading cause of workplace deaths was transportation-related accidents.

Taking advantage of workers compensation insurance keeps both your business and employees protected. It also saves you from unnecessary penalties for violating state laws. 

Keep reading to learn the workers compensation insurance requirements by state including why you should comply with workers’ compensation insurance law.       

Workers Compensation Insurance: What It Is and Why You Need It 

Workers’ compensation insurance covers medical expenses and lost wages of employees who experience work-related illness or injury. This insurance can cover the following:

If you have at least one employee, you need to get workers’ compensation insurance to protect your employees and follow state laws. Workers comp insurance also helps you avoid huge expenses and liabilities in your business.   

Workers’ compensation insurance has no standard minimum premium. However, it may range from $600 to $1,500 per year.

The coronavirus is covered by workers’ compensation insurance under specific circumstances. For instance, an employee who travels overseas for business and contracts COVID-19 can be covered.

For business insurance, coverage may include loss of home insurance, cyber liability and data breach, and employment practices liability insurance. The minimum premium may range from $350 to $750 per annum.

Small business owners can take advantage of merit rating credits depending on each state. If you are paying a $5,000 premium or less, you may get a credit of 5 to 15%, given that you haven’t had any lost-work-time claims during a certain period.

Workers’ Compensation Insurance Law per State

Workers’ comp insurance requirements differ for each state. Refer to the following table for an overview of all state workers’ compensation insurance:

StateMinimum no. of employeesIndividuals not covered
Alabama5Casual employees, real estate brokers, and domestic servants
Alaska1Domestic servants, contract entertainers, and part-time babysitters
ArizonaAll employersIndependent contractors and casual employees
Arkansas3Casual employees, state employees, and agricultural farm laborers
California1Deputy clerks, individuals offering voluntary services for a non-profit recreational camp, and domestic employees employed by a family member
Colorado1Volunteers and drivers having a lease agreement with a contract carrier 
Connecticut1Casual employees and independent contractors
Delaware1Casual employees and spouse and minor children not included in an endorsement to a farm employer’s contract of insurance
District of ColumbiaAll employersIndividuals with employers who are uninsured subcontractors can assert a claim against the general contractors
Florida4Independent contractors except for the construction industry, casual workers, and volunteers
Georgia3Domestic servants, independent contractors, and farm laborers
HawaiiAll employersPrimary and secondary contractors
Idaho1Casual employees, real estate brokers, and domestic servants
IllinoisAll employersFarmers and real estate brokers
IndianaAll employersCasual workers, farm or agricultural employees, firemen, and household employees
IowaAll employersHousehold employees with less than $1,500 income during 12 months before an injury and casual employees earning less than $1,500 for 12 consecutive months
KansasAll employersNot available
Kentucky1Maintenance, repair, and other related workers employed in a private home
Louisiana1Performers under contract and employees of private residential household
Maine1Some agricultural employees and independent contractors
Maryland1Independent contractors
Massachusetts1Casual employees and real estate brokers 
Michigan3Certain agricultural workers and real estate agents
MinnesotaAll employersFarmers exchanging work with family members or other farmers in the same community
Mississippi5Independent contractors
Missouri5Domestic servants, volunteer, and direct sellers
Montana1Freelance photographers, direct sellers, domestic servants, and real estate agents
Nebraska1Railroad workers and domestic servants
Nevada1Domestic servants, casual employees, and real estate agents
New Hampshire1Real estate brokers and direct sellers
New Jersey1Domestic workers and independent contractors
New Mexico3Real estate brokers and domestic workers
New York1Railroad workers and domestic servants working less than 40 hours a week
North Carolina3Individuals not in the course of the trade, business, or profession of their employers
North DakotaAll employersReal estate agents, independent contractors, and casual workers
Ohio2Not available
OklahomaAll employersReal estate brokers, volunteers, domestic servants in private homes, and sole proprietors
OregonAll employersCasual employees
PennsylvaniaAll employersCasual workers
Rhode IslandAll employersFarmers, real estate brokers, and casual workers
South Carolina4Casual workers
South DakotaAll employersIndependent contractors, volunteers, and farm laborers
TennesseeAll employersCertain undocumented workers
TexasWorkers compensation insurance optionalFederal employees and independent contractors
Utah1Real estate brokers
Vermont1Real estate brokers, casual employees, and independent contractors
Virginia3Individuals with employment not within the usual course of the employer’s business
WashingtonAll employersJockeys, domestic servants, performers, and sole proprietors
West Virginia1Church workers, domestic servants, and casual employees
Wisconsin3Domestic servants
WyomingAll employersIndependent contractors, casual employees, volunteers, and federal government employees
Workers Compensation Insurance Requirements By State

What Are the Penalties for Not Securing Workers’ Compensation Insurance?

Failure to fulfill workers’ compensation insurance requirements by state can lead to huge fines or jail time. Penalties depend on which state you are running your business, the total number of employees, and the period and reason for noncompliance.

Below are some penalties for workers’ compensation noncompliance in certain states:   

Getting Workers Compensation Insurance From a State Fund

Some states require workers’ compensation state funds. This means that employers in these states should avail of workers’ compensation from the state fund known as a monopolistic state fund. 

Examples of these states include Washington, Wyoming, Ohio, and North Dakota.

Secure Workers’ Compensation Insurance With Only the Best!

Working with established and reputable insurance companies, like ALLCHOICE is crucial in protecting your business and your employees. As a one-stop-shop for your insurance needs, ALLCHOICE offers workers comp insurance, auto insurance, commercial property insurance, umbrella insurance, and surety bonds.

With ALLCHOICE’s exceptional service, competitive pricing, and stable carriers, the whole process will be fast and easy. Get a workers’ compensation insurance quote now to keep your business and employees protected!

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