What you need to know about Workers' Compensation

So, you are in business for yourself…GREAT!  I’m sure you’ve taken the time to create a business plan, and you’ve obtained insurance as well. 

Did you know that Virginia Law requires that you purchase workers compensation if you have 3 or more employees?  Most likely, most people realize this.  But, did you know that if you have fewer employees, and they are hurt on the job, that you are still responsible for their care, and their payroll while they are out of work?   And, did you know that most individual, personal health insurance policies exclude work-related injuries?

So, even if you purchase workers compensation (and you should) for your employees, you may want to reconsider excluding yourself…as many small business owners elect to do because of cost.  Instead, consider the cost of paying for a medical claim out of pocket, or worse, if you are unable to get right back to work…consider how you are going to continue paying for all your business expenses?  Worker’s Compensation is available for employees and owners of companies.  It is rated based on the business operation, employees’ job duties, and experience.  Each code for workers compensation has a different rate based on the limit of risk for loss.


Roofer $21.06 per $100 of payroll/ Clerical .19 per $100 of payroll

Based on this example of rate, which job type has a greater potential of harm?  Of course, the roofer.  If you are a contractor, or a handy-man or carpenter, and happen to do 1 roof per year, but don’t disclose roofing in your job description…and a claim happens….you can face either a large audited premium, or worse…possibly have your claim denied.  Policies are issued on estimated payrolls, and are usually audited after the renewal/expiration of policy.  Any additional premium due for the prior term is due at the item of audit and the renewal policy premium is subject to increase based on the audited payroll.  Did you know you can monitor this and adjust your payroll quarterly?

What to do if
an employee files a Workers' Compensation claim

  • Make sure the injured employee receives the proper and necessary medical attention.
  • Complete the state-mandated accident reporting form.
  • As soon as possible, contact your agent to report any alleged work-related injury.
  • If you suspect insurance fraud is being committed at any time, please contact your insurance company’s Special Investigation Unit.

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