Workers comp insurance is a type of safety net for businesses and employees. It is mandated in many states which may leave you wondering, “What industries need workers comp?”
Often workers’ compensation insurance is not required by industry but by the number of people employed by a business, which may differ in each state. For instance, a business in Louisiana with only one employee is required to carry workers comp insurance, but businesses in Georgia can have 2 employees without providing workers comp.
It does get a little confusing but asking the right questions can help ensure you have the insurance you need.
Workers Comp Exemptions
There are workers comp exemptions. When wondering, “What industries need workers comp?” It is important to know that some industries may be exempt from mandatory coverage rules. Exemptions can depend on multiple factors by state or location.
Some of the most common exemption industries across states are as follows:
- Domestic Workers (cleaning, cooking, childcare)
- Farm Workers
- Casual Workers (as needed, no guarantee of employment)
- Family Members (working for family)
Of course, there are exemptions to this rule, but these industries commonly are not required to provide workers comp coverage. Each state may vary in its workers’ comp coverage requirements, but the aim is to protect both businesses and employees. It is important to ensure that any employees injured on the job can receive adequate medical attention as well as lost wages during their recovery time.
When answering the question, “What industries need workers comp?” it’s essential to note that the coverage rules differ among industries and states. For instance, independent contractors and the self-employed are typically not required to carry workers comp coverage by the state.
As such, business owners, executives, and managing partners can usually opt out of coverage to help lower their premiums. Many times, they choose to be covered to ensure adequate protection and the best safety net possible for their business. There are also some industries whose employees are otherwise covered, so additional workers comp coverage is not required.
Railroad workers are covered by the Federal Employers’ Liability Act and do not require additional workers comp coverage. Harbor workers and Longshoremen are covered by Longshore Act Benefits. The United States Government also provides its own worker’s compensation coverage to federal employees.
What industries need workers comp?
Unfortunately, there is no one and done list for industries that do or do not require workers compensation insurance. Many times, it is determined by the number of people a business employs but that can also vary from state to state. If you are a business owner or independent contractor, it’s safe to say that you can probably opt out of workers comp coverage in most states but you may not want to. If you aren’t sure about the workers comp requirements for an industry in your state, it’s best to call an insurance company to ask questions. Most workers comp insurance providers are more than happy to answer questions about the laws in your state and provide you with a quote.