Understanding workers' comp exemptions

Workers Comp 101

Most states require businesses to have workers' compensation insurance. This is a vital safeguard that supports employees if they experience a work-related injury or illness. However, certain situations might allow for exemptions. Let's explore what they are and how they impact you and your team.

What does a workers' comp exemption mean?

An exemption means that a specific worker or group of workers wouldn't be covered by your business's workers' compensation policy. Careful consideration is essential.

Balancing risks and responsibilities

Exemptions can help define the coverages of your insurance plan, but it's crucial to understand the implications. Without workers' comp, an injured employee could face significant out-of-pocket medical expenses and lost wages. It's important to weigh your business's circumstances against the protection that workers' comp provides.

Who might qualify for an exemption?

Each state has its own specific rules, but common examples of exempt workers include:

  • Independent contractors: Those who work independently and have control over their work.
  • Sole proprietors: Business owners without employees.
  • Volunteers and seasonal staff: Workers with specific roles or limited work arrangements.
  • Farm and domestic workers: Employees in agriculture and in-home service.

Important disclaimer: Laws are complex and vary by state. Thoroughly research your local regulations for accurate and up-to-date information.

How does the exemption process work?

If you think your business might qualify for exemptions, follow these general steps:

  1. Contact your state authority: Find the official website of your state's workers' compensation board or department of labor.
  2. Learn your state's rules: Understand the specific requirements and types of exemptions offered.
  3. Apply if eligible: Complete any necessary forms (like a "Notice of Election to be Exempt") and submit them with any required fees or documentation.

Key questions to consider

Choosing whether to use exemptions is a big decision. Ask yourself:

  • How comfortable am I with the potential risks to my workers? Could my business take responsibility for medical costs and lost wages?
  • What level of protection feels right for my team? Workers' comp can offer peace of mind and streamline accident recovery.
  • Am I confident I fully understand my state's laws? Misinterpretations could have serious consequences.

Getting the support you need

Workers' compensation is there to protect both businesses and employees. If you have further questions, reach out to your state's labor department for the most accurate information and a qualified insurance professional for personalized advice on your options.

Coverage built to last

Find peace of mind with business protection that puts you first.

Media inquiries

For all media inquiries, contact Liz Johnson, Public Relations Director:

Be the first to know

Stay up to date with insights and updates from EverPeak delivered straight to your inbox.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.

By subscribing, you agree to our terms of use

2 older men hunched over a work table in a shop discussing a project.

Frequently Asked Questions

Find answers to commonly asked questions about workers’ compensation.

What is workers' compensation?
Workers’ compensation is a form of insurance that benefits employers and employees in the case of a work-related injury or illness.
Who is required to carry workers’ comp?
Workers’ compensation laws vary by state, so it’s important to know your state’s requirements. In many states, workers’ compensation is required for employers with one or more employees.
What benefits are available?
Workers’ compensation can include medical care, lost wages and death benefits. Workers' compensation coverage may also safeguard businesses from legal action if an employee experiences a work-related injury or illness.
Who pays for workers’ comp?
The employer is responsible for purchasing and maintaining workers’ compensation coverage.
How much does workers’ compensation insurance cost?
Workers’ compensation premiums are based on factors such as payroll, industry and claims history, so premiums vary between businesses.