Many business owners ask the question, “Do I need worker’s compensation insurance?” If you answer YES to these two questions, then generally, you are required to have it:
Are you an employer?
Do you have at least one employee?
All Indiana employers are required to have worker’s compensation insurance, unless otherwise exempted. The exempt employment relationships include railroad employees, federal commerce employees, real estate professionals, independent contractors, athletes on scholarship, inmates of penal institutions and volunteers. If you are not exempt, you generally must purchase an insurance policy and file proof of this insurance with the Indiana Worker’s Compensation Board. A few Indiana employers are “self-insured.” A self-insured business pays for work-related injuries itself. However, employers must apply to and be authorized by the Board to obtain this status.
Employers must post a notice of worker’s compensation coverage in a conspicuous location within the work place. This posting must contain the name, address and telephone number of the employer’s insurance carrier or the person responsible for administering worker’s compensation claims. Failure to comply with the posting requirement may result in a $50 penalty as assessed by the board.
The penalties for failure to carry sufficient insurance coverage include paying reasonable medical expenses, double compensation and reasonable attorney’s fees during the uninsured period. The board may pursue court action against an employer for failure to carry insurance. The courts have the authority to order an employer to cease doing business until proof of coverage can be established. The courts may also order an employer to provide proof of financial ability to pay any claims and to deposit a security, indemnity or bond with the Board to secure payment for any injuries occurring during the lapse of insurance coverage.
Carrying worker’s compensation insurance is an important part of being a responsible business owner and can impact all aspects of the business if the insurance is not obtained.