If you’re a business owner and have employees, any number of employees – even just one – you must have workers comp.
This is a basic rule and one that all 50 states follow. I’ve heard that New Jersey and Texas both have exceptions to this rule, but I don’t know much about how those states’ laws work. As an insurance agent licensed to do business in California, Arizona, and Nevada, I only really know the rules of the states we do business in, and that’s all I’m qualified to write about.
And in California, Arizona, and Nevada, if you have an employee, you must have workers comp.
Most employers understand and accept these conditions since they have been around since the early 1900s. Hardly anyone likes to pay for workers comp, but there is great benefit to it, in that at least it absolves the employer of getting sued by the employee for the employee’s injury.
Sometimes, however, a problem occurs and that is where a business owner is unsure if the person doing work for them, that is, their “worker-in-fact” qualifies an employee. The business owner is therefore unsure as to whether they need to get workers comp.
So here’s a list of workers that are in fact employees:
If you have any one of these, no matter how temporary or how few hours they work over the course of a year, you must have a workers comp policy in force to cover any injury or illness they may sustain on the job.
For the sake of clarity, here are a couple scenarios where you might or might not have an employee depending on the specific situation.
Lastly, here are two more categories of workers-in-fact that are usually not considered employees, and you typically don’t need to get workers comp for them, although there are scenarios where you might need or want workers comp for them:
While it is true that some businesses mistakenly don’t have workers comp in place because of a lack of understanding about their state’s workers comp laws and what constitutes an employee, it is also true that other businesses do understand the need and are intentionally operating without it.
The state of California calls this being “illegally uninsured” whether or not it’s intentional and the consequences are the same – and significant.
Here are a few things that can happen in California if you are caught without workers comp where you had a need for it:
Source: https://www.dir.ca.gov/dwc/faqs.html#5
It is therefore a good idea to determine whether your worker-in-fact is an employee, preferably before the date of hire.
If you are currently illegally uninsured, the best time to get a workers comp policy in place is now! You won’t be penalized by the state for your past. You won’t raise a red flag anywhere.
Let’s say you realize you need to get workers comp in place. What do you do?
This is the easy part: call us. That’s it! Just use the button below to start the process.
We at Gillespie Insurance Services specialize in workers comp and can get you covered even if you have no current or prior coverage in place. We have a wide variety of insurance companies that can give you a great rate, even if you’re brand new or have been operating without coverage.
Just click on the “Schedule a Call” or “Send Email” button below.
Our process is simple:
Once we have a proposal for you that you accept, we issue your policy and you can immediately get your employees out in the field or the floor working – legally!
I’m the commercial producer and owner at Gillespie Insurance Services.
Gillespie Insurance Services helps people and businesses in California, Arizona and Nevada.