Understanding your state’s workers’ compensation insurance requirements is critical

Workers compensation insurance is something that is regulated from state to state. This is in contrast to other types of regulation which, of course, operate on a federal or state basis. Therefore, business owners and managers looking for information about requirements for the type of coverage they need and other regulations cannot simply look up a uniform policy. They should look specifically at their own state to see what the requirements are where they do business.

What is one of the main points of differences in a state’s workers’ compensation requirements? The most common point of difference relates to the number of employees a company has before it is required to provide proper coverage. Building on this, there’s also the point of the industry you’re in, which in your state can affect or change that threshold for the number of employees.

Combined, those are the two most common and most important differences. What you will see is that many states have modified their workers compensation schemes to reflect the local industries of interest as well. Building on all the points above, let’s look at a few specific examples.

Tennessee has long been known as a coal mining center. Therefore, in the state, all employers in the coal mining industry must receive workers’ compensation regardless of the number of employees. This is also true in the state for construction companies, but it is more common in other states as well. In Tennessee, if you don’t work in construction or mining, the requirement changes to five or more employees as the threshold.

As another example, look at the state of Florida. There, agriculture reigns as one of the major industries of the state. Therefore, in the agricultural sector, the requirement is that employers with six or more permanent employees, or 12 or more seasonal workers who work more than 30 days, must pay employees. Construction companies must provide coverage regardless of the number of employees, and meanwhile, all other businesses in the state must provide coverage if they have four or more employees.

Other states simplify things a bit. In Louisiana, for example, all employers are required to have workers’ compensation insurance unless otherwise exempt.

The best course of action is to consult an experienced professional who knows the ins and outs of your state’s policies, what you need, and also how to get a lot. Independent brokers should be able to ease the hassle of the process for most business owners by connecting them with trusted providers and securing affordable rates.