Workers Comp Insurance For Independent Contractors – Labor law was first established in Michigan in 1912 as a way to protect the relationships between businesses and workers that keep them going. Labor law guarantees medical treatment, job services and lost wages to workers injured on the job, regardless of fault. Instead, employees cannot file a civil lawsuit against their employer to obtain additional compensation for pain and suffering. Businesses are, of course, responsible for purchasing workers comp insurance for their employees. However, this leaves a lot of room for questions regarding independent contractors and other workers who file 1099s and receive non-workers’ compensation.
According to Section 161(1)(b) of the Michigan Workers’ Compensation Law, “If an employee does not carry on a separate business, is self-employed and contributes to the community, and does not employ other employees, the employee shall be considered an employee.” Only employees who meet these strict qualifications can receive workers’ compensation.
Workers Comp Insurance For Independent Contractors
Independent contractors do not meet specified eligibility requirements to receive company benefits as employees. If any type of accident occurs and the independent contractor is injured, they will be fully responsible for their health care and other related needs. However, because independent contractors are not technically employees, you may be able to file a lawsuit and recover additional damages related to negligence with the help of a trusted attorney. Yes, it is a good idea to contact an attorney regardless of how you were employed to make sure you receive the benefits and/or compensation you are entitled to.
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Michigan employers are required to purchase workers’ compensation insurance for independent contractors if said contractors work full-time (meaning at least 35 hours per week for at least 13 weeks); if three or more employees work at the same time; if they are a public employer; If they are an agricultural employer who maintains three or more full-time employees, or if the employer supervises one or more full-time household workers. Not having competent workers’ comp insurance can result in serious civil or criminal consequences, including fines of $1,000 per day and up to six months in jail. Company representatives may be held responsible for accidents.
To learn more about Michigan’s workers’ compensation laws and what types of benefits you may be eligible for based on your employment status, speak with one of the experienced workers’ compensation attorneys at Aiello Law Group. Call us today at 313.964.4900 or fill out the form in the sidebar or on our contact page to learn more about how we can help.
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Employee Versus Independent Contractor
An independent insurance agent is an important advisor to any employer when it comes to workers’ compensation insurance and how coverage works. Having the right person with experience in your corner is a great place to start.
First, you need to know what workers compensation insurance is before you understand the laws that govern it. Workers’ compensation insurance is insurance taken out by an employer or independent contractor to help cover medical expenses for injuries or illnesses that occur while on the job or as a result of an employee’s work.
This policy will also pay partial wages, usually two-thirds, of any employee, incorporated owner, or independent contractor during their recovery period. An independent insurance agent is an excellent resource when it comes to knowing the details of workers’ compensation coverage.
A workers compensation policy is the best foundation when it comes to coverage. A standard policy form will have limits for bodily injury coverage, bodily injury due to disease, and bodily injury due to disease policy limits. The rates you and your private insurance agent choose for this coverage depend on the risk factors of your business, how many employees you have, how risky your business is, and what safety procedures you already have in place.
Free Michigan Independent Contractor Agreement
$100,000/$100,000/$500,000 are the basic minimum required limits generally required by law of an employer or independent contractor.
Below you will find the declaration page for the standard form for a workers’ compensation policy. Knowing what each element means is key to properly understanding your coverage and how much protection your business actually has. This policy form shows you the important things you’ll see on the standard policy declaration page, so you know what to look for.
The example above uses a $1,000,000 per occurrence/$1,000,000 per activity/$1,000,000 policy limit. Since coverage can be as low as basic legal requirements and higher than for example, it is best to discuss your business needs with your independent insurance agent.
Other coverage options that can be added to a standard policy form are subrogation waivers. This is popular policy endorsement and will only prevent the contractor’s workers’ compensation company from commencing a lawsuit or enforcing liability for a third-party lawsuit.
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All issues should be discussed with your trusted advisor as they will inevitably come up in the world of workers compensation insurance.
By now, you should have a good understanding of what is included in a standard workers’ compensation policy form. But you also need to know what is not covered.
Insurance fraud is a big deal. Filing a false claim or one that has been used in an attempt to get a large payment from an insurance company should be taken very seriously, mainly because it lacks integrity, but also because the consequences can be bad for you, your employee and yourself. business.
The consequences of filing the wrong workers’ compensation claim and getting caught are not worth the risk. An employee may file a false claim for compensation for excessive injury or illness. An employer may misclassify an employee to avoid filing a claim, and a health care provider may prolong an injury or illness in order to continue receiving reimbursement from the insurance company. As the employer, you set the stage. And by having proper security procedures in place and a clean claims reporting process, you can avoid the possibility of false claims being filed.
Can Independent Contractors Claim Workers Compensation?
The cost of a standard workers’ compensation policy form will vary by your business. The cost is as large as the number of industries in the world. So the only true way to know is to have your agent give you the numbers and details of your business. While it’s nearly impossible to know what each workers’ compensation premium will be, here are some factors to look for.
The benefits of good integration far outweigh the costs. A standard policy form for workers’ compensation policies may not have adequate coverage. Not all businesses are the same and therefore must be individualized to ensure that filing is accurate and sufficient.
Having an experienced insurance agent properly advise you on how much coverage you should receive will determine how much money your injured workers will receive and ultimately help you avoid large lawsuits. You never know what you don’t know, so shedding some light on workers’ compensation coverage and what’s included in insurance can help you make a more educated decision when you’re ready to buy.
Each state has its own rules when it comes to workers’ compensation insurance, as all states except Texas mandate some form of workers’ compensation coverage. What is a standard policy form in Arkansas may not be a standard policy form in Nebraska. There may be different forms of workers’ compensation that may apply to certain documents and depending on the state in which your business resides.
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Knowing what your state’s specifics are regarding coverage types and different policy forms can be discussed with your local independent insurance agent. They have experience supporting government regulations and policy forms when it comes to workers’ compensation.
Independent insurance agents have access to many insurance companies, ultimately providing you with the best coverage, availability and competitive pricing while working for you. And as your company grows and your needs change, they’ll help you adjust your coverage, up or down, to make sure you’re adequately protected without overpaying. Find an independent insurance agent in your community here. One of the most important types of business insurance, workers’ compensation insurance is coverage that almost every business will need to purchase. If one of your employees is injured on the job or suffers a work-related illness, workers’ compensation insurance will cover the employee’s medical bills and a percentage of their weekly pay.
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