As an employer in Wisconsin, you have certain obligations to your employees, one of which is the purchase of workers compensation insurance. This coverage is designed to provide financial benefits to the employee in the event of a job-related injury or illness, as well as protect your business against potential liability. Without it, you not only violate state law and face potential civil penalties, but you could also be putting your business on the line. At Lakeview Insurance – The Patrick Zuelsdorf Agency, we make it easy to select and purchase workers compensation insurance that minimizes your risks, protects your employees, and helps your business maintain compliance with state law.
Who Needs Workers Compensation Insurance?
If you have an employee – even a part-time worker – you probably need workers compensation insurance. This includes employees who are your family members, as well as yourself if you are the sole employee of your corporation. Even sole proprietors can opt to purchase workers compensation insurance, although it is not required for those individuals.
Generally, the only people you do not need to purchase workers compensation insurance for are domestic workers in your home and individuals who provide your business with independent contract work. Note that it is important to properly differentiate between an employee and an independent contractor. If you provide the tools, set the hours, control the work, and maintain the right to hire and fire an individual, it is possible that a court could uphold that person is an employee entitled to workers compensation benefits.
What Happens If You Do Not Purchase Coverage
In Wisconsin, most employers are required by law to carry Workers’ Compensation Insurance. Failing to do so can lead to serious financial and legal consequences.
If your business does not have valid coverage, an injured employee has the right to file a claim directly with the Wisconsin Department of Workforce Development (DWD). In these cases, the state may pay benefits to the injured worker through the Uninsured Employers Fund—and then pursue your business for reimbursement of all claim costs.
This reimbursement can include:
-
All medical expenses and lost wages paid to the injured employee
-
Administrative costs associated with the claim
-
A penalty of up to double the amount of the benefits paid, or a minimum of $750, whichever is greater
In addition, employers without proper coverage may face:
-
Fines of up to $10,000 per violation
-
A stop-work order, effectively shutting down business operations until coverage is secured
-
Possible personal liability for corporate officers or business owners
Beyond financial penalties, the lack of Workers’ Compensation coverage also removes certain legal protections. Without insurance, an employee could sue your business directly in civil court for damages related to a work injury, and you would not be allowed to claim employee negligence as a defense.
What Workers Compensation Covers
Workers compensation provides employee benefits for work-related illness, injuries, and death. This may include, but is not limited to:
- Workplace violence
- Exposure to toxic chemicals
- Natural disasters
- Terrorist attacks
- Car accidents (collisions that occur during an employee’s commute are excluded)
Benefits may include temporary compensation, medical bill coverage, and even long-term support benefits for permanent medical care or job re-training. The amount of issued benefits is usually a percentage of the employee’s usual wage and is dependent upon the extent of the employee’s impairment and whether it is temporary or permanent.
Workers compensation coverage operates on a ‘no-fault’ system, meaning there does not need to be an establishment of liability for the coverage to provide compensation. Instead, benefits are distributed regardless of employer or employee fault. There are some exceptions, however. Purposeful, self-inflicted injuries, for example, are generally excluded from workers compensation coverage.
This no-fault system provides two benefits. First, the employee gets the care and financial assistance needed after a workplace accident. Second, the employer enjoys legal protections that typically prevent the employee from suing the employer for additional compensation. Of course, there are exceptions. For example, the employee may have the right to pursue a civil suit for damages if he or she waived the right to workers compensation coverage before the accident or if your business otherwise fails to post a notice of the employee’s right to waive coverage.
What to Expect When an Employee is Injured
As soon as an employee becomes injured or falls ill, your obligation as an employer is to provide information about your worker’s compensation insurance company and policy number, as well as the date your coverage expires. You must also report the injury to your carrier.
Purchasing Workers Compensation Coverage for Your Employees
As a business owner, you have a lot of responsibilities, as well as a lot of risks. You cannot afford to make mistakes when it comes to your commercial insurance coverage – especially your worker’s compensation protection. Here at Lakeview Insurance – The Patrick Zuelsdorf Agency, we understand the unique needs and concerns of Wisconsin employers and know how to help you find coverage that minimizes your exposures, protects your employees and helps your company remain compliant with state laws.
Whether you are starting a new business, hiring your first employee, or looking to explore your worker’s compensation coverage options, we want to help you get the protection you need. Contact our office today to find out more about Wisconsin workers compensation coverage options and to request your free quotes. We look forward to serving you soon.
