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Workers’ Compensation and Your Business

By February 21, 2019 Business Insurance, Insurance

Do you need Workers’ Compensation coverage?
Of course you do, if your employee is injured while performing his duties as an employee, who will pay the medical cost incurred from their injury? What about the lost wages from the time out for the injury incurred? If you have workers’ compensation in place, it protects your business and yourself from financial losses from their injury.

Are you required to have Workers’ Comp?
The NC Workers’ Compensation Act requires all businesses that employ three or more employees to obtain workers’ compensation or qualify as self-insured. Businesses would include those operating as corporations, sole proprietorship, limited liability companies and partnerships. Even if you have “independent contractors”, the Industrial Commission could still find those contractors were employees based on several factors they consider, (how, what kind and the scope work is performed).
Individuals who are sole proprietors, members of LLCs, and partners are not automatically counted as employees. Corporate officers may elect to be excluded or included. However, officers are still counted as an employee when determining the three or more employee rule.

How are the rates determined?
Workers’ Compensation rates are determined on your payroll and the kind of job your employee is performing. For instance a roofer has a greater risk of being injured than an administrator sitting at a desk.
What if I don’t carry workers’ compensation insurance?
According to the Industrial Commission of North Carolina, failure to carry workers’ compensation can result in stiff financial civil penalties, criminal charges and even imprisonment.