With a very small number of exceptions, every employer in the State of Massachusetts is required by law to carry an active Massachusetts Workers Compensation Insurance Policy. Generally, if you have employee’s you need coverage. Most business owners in the state know that they need to carry Massachusetts General Liability Insurance to protect themselves from law suits from the public, but not everyone is aware that not carrying the proper Workers Compensation coverage can also set you up for a law suit. An injured employee has the legal right to file a civil action or lawsuit against their employer, and will most likely be guided to so by a personal injury attorney.
The Massachusetts DIA is out in full force checking job sites and businesses for Workers Compensation violations. If they find you in non-compliance with Massachusetts states law then a STOP WORK ORDER will be issued. Fines are a minimum of $100 a day, and a violation can also put public contracts in jeopardy. If you have been issued a stop work order, we can help you. Call us at 508-485-0130.
What are the Exceptions?
Partnerships, LLCs, LLPs and Sole Proprietors. Non-Corporations are not required to carry coverage for legal owners or partners of the Business, but may choose to do so if they would like the protection that a policy would provide including medical care and wage replacement due to a work related injury. Any party that is not a legal owner or partner would need to be covered by a Massachusetts Workers Compensation Policy.
Corporate Officers. Any corporate officer that owns at least 25% of the corporation can apply for an exception with the Massachusetts Department of Industrial Accidents using the AFFIDAVIT OF EXEMPTION FOR CERTAIN CORPORATE OFFICERS OR DIRECTORS – FORM 153. Once approved, the corporation will receive an exemption letter that needs to be submitted to the insurance company for exemption on a current policy. If the corporation has no other employees, and all officers are approved for exemption, then a Workers Compensation policy would not be needed.
Independent Contractors. Businesses are not required to cover independent contractors that they hire, but the laws surrounding independent contractors are very strict. The sure fire way to make sure an independent contractor you hire will not be considered your employee is to ask for a Certificate of Insurance. If they are carrying their own active Workers Compensation coverage then you know that they will not be picked up by your insurance.
If you would like further clarification on any of the exemptions listed above, we can help you. Our experienced Commercial Insurance department can answer any questions you may have, and can help you establish the right coverage for your needs without over insuring your business. Call us today at 508-485-0130, and follow us on Facebook, Twitter and LinkedIn for important insurance tips for your Massachusetts business.