Worker’s compensation insurance can cover the medical injuries of a work-related injury, but is there a size limit for this policy?
Workers’ compensation is a policy that covers the business of your clients should one of their employees get injured or sick while on the job. Without it, they are subject to a lawsuit that could drive their business into the ground. Many people believe that workers’ compensation is only required if their business possesses heavy equipment that poses an actual threat to human lives. They believe that only big businesses require this policy. But this kind of thinking is incorrect. There is no such size limit for workers’ compensation. Here are a few reasons your business clients need to consider workers’ compensation–regardless of the size of their business.
Employment Thresholds
While physical size of the business may not matter, the employee count does. In states like Arkansas, Georgia, Michigan, New Mexico, North Carolina, Virginia, and Wisconsin, it is legally required that they carry workers’ compensation if they have three employees or more. In Florida and South Carolina, that is bumped to four employees. And in the states of Alabama, Mississippi, Missouri, Tennessee, that number increases again to five employees or more.
No Requirement
There are states like New Jersey and Texas where workers’ compensation is not required, it is voluntary.
Sole Proprietor Exception
No state currently requires the business owner to take out a workers’ compensation policy on themselves–when their business has no employees. They can do so optionally if they wish to do so. When they hire their first employee, however, they must comply with their state’s laws regarding workers’ compensation.
Substitute the Lawsuit
Workers’ compensation is legally required in most states. In states that don’t require workers’ compensation, things can get a bit messy if the business owner wants to save a few bucks. An employee, should they get injured or ill on the job, is within their rights to sue the employer if he or she fails to cover the medical bills that come from their injury or illness.
We at PMC Insurance Group are experts on workers’ compensation and can help you put the proper policies in place for all of your contracting clients. To learn more about getting competitive coverage for your contractor and construction clients, contact us today.
