Utah Workers Compensation Insurance
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Utah Workers' Compensation for Start ups
Chances are if you have more than three employees, you need Utah workers' comp insurance. Almost every business in the Utah that has employees has to handle the problem of workers' compensation. Most states (with a few exceptions) require employers to purchase a workers comp insurance policy to handle their statutory obligations to workers who are injured or made ill due to a workplace exposure.
Today workers' compensation laws provide fairly comprehensive and specific benefits to workers who suffer workplace injury or illness. Benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation. Failure to carry workers' compensation insurance or otherwise meet a state's regulations in this regard can leave an employer exposed not only to paying these benefits out of pocket, but also to paying penalties levied by the states.
Currently in the United States workers' compensation regulations are for the most part under the jurisdiction of the individual states. There are some federal workers' compensation statutes, such as for longshoremen and harbor workers, but for most employers, the system of workers' compensation rules and regulations they usually deal with is enacted by the states (along with Washington D.C. and Puerto Rico).
How States Differ on Workers Comp
In most jurisdictions, employers can meet their workers' compensation obligations by purchasing an insurance policy from an insurance company. However, five states and two U.S. territories (North Dakota, Ohio, Puerto Rico, the U.S. Virgin Islands, Washington, West Virginia, or Wyoming) require employers to get coverage exclusively through state-operated funds. If you're an employer doing business in any of these jurisdictions, you need to obtain coverage from the specified government-run fund. These are commonly called monopoly state funds. A business cannot meet its workers' compensation obligations in these jurisdictions with private insurance.
Nevada was a monopoly state until recently, but now it's shifted to a system of private insurance and the former state fund has morphed into a mutual insurance company. Thirteen other states also maintain a state fund, but the state funds compete with private insurance. In these states, an employer has the option (at least theoretically) to use either the state fund or private insurance. Those states that offer employers this option are Arizona, California, Colorado, Idaho, Maryland, Michigan, Minnesota, Montana, New York, Oklahoma, Oregon, Pennsylvania and Utah.
Utah Workers' Comp—Do Start up Need It?
Generally speaking, sole proprietors and partnerships aren't required to purchase workers' compensation insurance unless and until they have employees who aren't owners. Some states will allow sole proprietors and partners to cover themselves for workers' compensation if they choose to, but it isn't required. (Consult with your local state to verify what is required)
Some states don't require an employee to be covered if he or she is paid solely by commission. Again, check with the workers' compensation regulators in your particular state to see how they handle this.
Interestingly, a few states even give employers the option to not purchase workers' compensation insurance at all. These states are few and far between: Texas and (at least in theory) New Jersey. Remember, though, that just because the state may allow an employer to go without workers' compensation insurance, the employer is still liable under the state's workers' compensation laws for injured workers. Not having workers' compensation insurance, even if allowed by a particular state, does not relieve the employer of financial responsibility for injured workers.
Most states also allow large employers to self-insure for workers' compensation, but the rules about who can and cannot self-insure again vary significantly from state to state. Typically, your state department of insurance can help you determine if your business is required to purchase workers' compensation insurance. A general rule is that if you have employees who aren't owners of the company, you probably need workers' compensation insurance. Speaking of employees, here's a potential trap to be aware of and avoid: under most state's workers' compensation laws, you might have employees you don't know about. That's because most states will treat an uninsured contractor or subcontractor as your employee if he or she is injured while doing work for your company.
Call or Email Bret Harding to get your Utah’s Workers Comp Insurance in-place!
Ph. 801-372-2647