Insurance. That word can start anyone’s head buzzing. And if you are a small business owner, the complexities of insurance can be daunting, especially understanding the laws governing worker’s compensation insurance, which is simply insurance that protects an organization and its employees in case of a job-related injury or illness.
Does My South Carolina Small Business Need Worker’s Compensation Insurance?
South Carolina law requires businesses and non-profit organizations that employ four or more employees, or that had an annual payroll of greater than $3,000.00 in the prior calendar year (regardless of the employee count) to have worker’s compensation insurance. The number four includes full and part-time employees and family members working in the enterprise.
By the same measure, general contractors need to have worker’s compensation insurance and they can require their subcontractors to carry their own insurance or be covered by the contractor’s policy.
Sole proprietors, partnerships, members of a limited liability company (LLC), and independent contractors are not required to have worker’s compensation insurance, but they can opt to get coverage. Also excluded from the requirement to have this insurance are seasonal workers, volunteers, some agricultural employees, railroad employees, federal employees, owner-operator drivers, real estate agents, and state and county fair associations.
The primary consequence of not having worker’s compensation insurance is that the business will be liable to pay for the care of any workers injured on the job. That includes paying for medical expenses, ongoing medical treatment, and paying the injured employee equal to two-thirds of his/her weekly wage while he/she is unable to work. Other penalties could include fines, criminal charges, or possibly the loss of a business license.
What Are the Benefits of Worker’s Compensation Insurance?
The benefits for injured workers include paying expenses to cover treatment of the injury or job-related illness, paying temporary and permanent disability benefits, compensation for disfigurement, reimbursement for medical travel expenses, paying the costs of rehabilitation and retraining, and paying death benefits for fatal work accidents to surviving dependents.
What Limitations Apply?
Generally, claims are denied if an employee is injured while using illegal drugs, is intoxicated, or while committing a crime. Claims are also denied if an injury was self-inflicted, or that occurred while behaving in a way that violated company policy.
Where Can My Company Get Worker’s Compensation Insurance?
Worker’s compensation insurance can be obtained through a commercial insurance carrier that is licensed for this coverage in South Carolina, or through the state’s assigned risk program. An employer can also apply to self-insure. There are brokers that specialize in this area.
If your company uses a payroll service, you can benefit by bundling your insurance premium with your payroll.
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