Missouri Workers Comp: Who Needs It?

In the state of Missouri, businesses are generally required to carry workers' compensation insurance if they have five or more employees. However, there is an exception for the construction industry, which must carry this insurance if they have one or more employees. Employers who don't fall into these categories may still choose to carry workers' compensation insurance, and this is advisable as they will otherwise be vulnerable to civil lawsuits brought by employees who are injured during work.

Do construction companies need workers' comp insurance?

In the state of Missouri, employers with five or more employees are required to carry workers' compensation insurance. However, this number is lower for construction companies, which are mandated to have this insurance if they have one or more employees. This is because the physical nature of construction work increases the risk of injury. For example, if a carpenter has an accident with a nail gun, it could lead to hefty medical bills and downtime.

Workers' compensation insurance covers medical expenses when an employee is injured on the job or develops an occupational illness. It also covers part of the wages lost when an employee suffers a temporary or permanent disability. Additionally, it can provide compensation if an employee dies as a result of their injuries.

While sole proprietors and partners are not covered by workers' compensation insurance unless they elect to be, close family members and members of a limited liability company are presumed to be covered unless they opt out.

It is important to note that there are certain exemptions to the requirement for workers' compensation insurance in Missouri. These include farm labourers, domestic servants, certain real estate agents, and direct sellers. Employers who don't meet the requirement for the number of employees or have employees in these exempt categories may still choose to carry workers' compensation insurance to avoid civil lawsuits in case of work-related injuries.

The cost of workers' compensation insurance for construction companies varies depending on factors such as the number of employees, the type of work, location, and claims history. On average, construction companies pay around $254 per month or $3,054 annually for this type of insurance.

Who is exempt from workers' comp insurance?

In Missouri, workers' compensation insurance is required for all businesses with five or more employees. However, there are certain exemptions to this rule.

Sole proprietors and partners are not covered by workers' compensation insurance unless they choose to be. They are considered employers rather than employees and must be included on the policy by endorsement.

On the other hand, members of a limited liability company (LLC) are included in the coverage by default, but they can choose to be excluded by providing written notice to the insurance carrier and employer.

Corporate officers are also included in the coverage as they are considered employees. However, if the corporation has no more than two owners who are also the only employees, they can opt out by filing a form with the Missouri Department of Labor's Division of Workers' Compensation.

Additionally, certain types of workers are exempt from workers' compensation requirements in Missouri. These include:

• Domestic servants in private homes
• Farm labourers
• Certain real estate agents
• Direct sellers
• Commercial motor-carrier owner-operators (commercial truckers)
• Qualified real estate agents
• Occasional labour performed for or related to a private household
• Unpaid volunteers of a tax-exempt organisation operating under specific sections of the federal Internal Revenue Code

It is important to note that employers who don't meet the minimum employee count or have employees in these exempt categories may still choose to purchase workers' compensation insurance to protect themselves from civil lawsuits in case of employee injuries.

Do sole proprietors need workers' comp insurance?

In the United States, sole proprietors are generally not required to carry workers' compensation insurance if they have no employees. However, this may vary depending on the state and the industry. In Missouri, sole proprietors are not required to carry workers' compensation insurance, but they can choose to be covered.

While sole proprietors may be exempt from workers' compensation requirements, there are some instances where they may need to consider obtaining this type of insurance. For example, if you work in a high-risk industry, such as construction, you may need workers' compensation insurance to obtain a license, permit, or certification. Additionally, some companies may require independent contractors to have workers' compensation insurance, even if it is not legally mandated. This is to protect themselves from potential claims or lawsuits if the contractor is injured while working for them.

Even if it is not required, there are several benefits to sole proprietors for obtaining workers' compensation insurance. It can help with medical costs and lost wages if you are injured on the job. It can also provide peace of mind and protect you financially in the event of an accident. If you are a sole proprietor considering whether or not to obtain workers' compensation insurance, it is important to research the laws and requirements specific to your state and industry.

Furthermore, while sole proprietors may not be legally required to carry workers' compensation insurance, other types of business insurance are often recommended. General liability insurance, for example, can protect you in case someone is injured on your property or if your work damages someone's property. Professional liability insurance can provide coverage if a client is dissatisfied with your work or advice. Commercial property insurance can help protect the equipment and inventory you need to run your business, and commercial auto insurance is important if you use a vehicle for work.

What happens if I don't have workers' comp insurance?

In the state of Missouri, employers are required to carry workers' compensation insurance if they have five or more employees. However, employers in the construction industry must carry this coverage if they have one or more employees. This applies to all employers, regardless of whether the employees are part-time, casual laborers, full-time, or family members.

If employers don't have the required number of employees or have employees in exempt categories, they may choose to carry workers' compensation insurance. Exempt employers that decide not to purchase this insurance or to self-insure are exposed to civil lawsuits brought by employees injured during work. Therefore, even though they are not required to, employers exempt from coverage may wish to obtain workers' compensation insurance.

In most states, workers' compensation insurance is required for businesses with one or more employees, and it covers medical costs and lost wages for work-related injuries and illnesses. While self-employed individuals and independent contractors are usually exempt from coverage requirements, they might purchase a policy to fulfill a contract or cover medical bills and lost wages from a work-related injury.

If an employer does not have workers' compensation insurance, most states will allow employees to sue their employers in court through a personal injury claim. A personal injury lawsuit has advantages over a workers' comp claim, such as seeking the full amount of losses without being subject to an arbitrary cap set by law, and collecting money damages for emotional distress caused by injuries. However, there are also drawbacks to suing in court, including a much slower process and the need to prove that the employer was at fault for the accident.

What are the benefits of workers' comp insurance?

In the state of Missouri, employers are required to carry workers' compensation insurance if they have five or more employees. However, employers in the construction industry must carry this insurance if they have one or more employees. This mandate applies to all employers, regardless of whether the employees are part-time, casual laborers, full-time, or family members.

Now, let's discuss the benefits of workers' compensation insurance:

Benefits of Workers' Comp Insurance

Workers' compensation insurance offers several advantages for both employees and employers. Here are some key benefits:

• Protection for Employees: Workers' comp provides financial protection and medical care for employees who are injured on the job. It covers medical expenses and provides temporary disability payments while they recover, replacing part of their lost wages. It also offers compensation for permanent impairments caused by work-related injuries.
• Protection for Employers: Carrying workers' compensation insurance reduces the risk of being sued by employees for workplace injuries. In Missouri, employers who don't have the required coverage are exposed to civil lawsuits if their employees are injured during work. Workers' comp insurance helps shield employers from such legal actions.
• Reduced Financial Risk: For employers, workers' compensation insurance offers financial protection in the event of a serious accident involving an employee. It helps mitigate the financial burden of medical expenses and lost wages, reducing the risk of a crippling financial loss for the business.
• Conflict Reduction: The workers' compensation system is designed to reduce conflicts between businesses and employees when injuries occur. It provides a cooperative arrangement where employees receive benefits regardless of fault, and employers are protected from costly litigation.
• Compliance with Laws: In Missouri, failing to provide the required workers' compensation coverage can result in legal consequences, including fines or even criminal penalties. Complying with workers' comp laws helps employers avoid these penalties and ensures they are operating within the legal framework.
• Support for Employees' Families: In the unfortunate event of an employee's death due to a work-related injury, workers' compensation provides benefits to the employee's survivor dependents. This support can be crucial for the financial well-being of the family.
• Vocational Rehabilitation: In some cases, workers' compensation may also provide vocational rehabilitation services to help injured workers return to productive employment. This can include retraining and other benefits to assist employees in regaining their ability to work.

Frequently asked questions