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True or False: I'm Covered Under Work Comp

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True or False: I'm Covered Under Work Comp

Workers Compensation Insurance, typically know as work comp, is something you may be familiar with. However, you might not realize that coverage can differ between Corporations, Partnerships, LLCs, LLPs and Sole Proprietorship.

LLC Members, Partners and Sole Proprietors:
Are automatically excluded from the workers compensation coverage. However you may elect to be included by submitting your request in writing.

Officers of a Corporation:
Are automatically including in the workers compensation coverage, but, by written request may elect to be excluded.

So what does all this mean? Let me tell you a story….

The owner of Lighting Installation Services LLC was on some scaffolding installing new ballast when he lost his balance and fell resulting in severe but not critical injuries. The owner did not elect work comp coverage so he turned to his health insurance provider. When he submitted the claims to his provider, coverage was denied based on the fact that it was a work-related injury.  Regardless of whether the accident could have been avoided, coverage would have been granted through work comp or his health care provider had he taken the necessary steps.

Many times the mentality of businesses is to save as much money as possible. While being frugal is a great outlook, sometimes you can’t afford to save that much. Owners regularly ask, “Why would I, as one of the owners, officers, partners or members of the company, want to pay for worker’s compensation insurance on myself when I would never file a claim? Besides, I have health insurance.”

This is where the false sense of security comes into play. Not all health insurance policies will cover job-related accidents. In fact, most policies exclude them unless a special rider is put into place.

No matter what the savings is, I recommend that all owners, officers, partners, and members of a company elect to be included in the workers compensation coverage; unless the following steps have been taken to replace it:

1. Health Insurance Policy with a rider that covers job related injuries. Again, don’t assume your health insurance policy automatically covers your for job related injuries.

2. Disability Income Policy which will provide reimbursement for lost income from a job related injury where you are unable to resume any sort of work duties.

3. Life Insurance Policy that equals the amount of the death benefit offered through the workers compensation policy.

Even if this doesn’t apply to you directly, I guarantee you know someone who owns their own business. I would highly encourage you to pass this information on as a majority of owners have no idea that they are automatically excluded from coverage they purchased.  So the next time someone says their health insurance will cover their work related injury you can respond with FALSE! 



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Welcome to our Risk Management Minute Blog! My name is Jessica and I joined the First Insurance Group team in 2008. I began working in the Church Division in 2009 and as part of my job began to learn about the specific needs Churches face in regards to Risk Management. We have made it our goal to not only supply you with relevant information, but to take the work out of risk management by creating forms for you to print and use. Have questions on a topic we have yet to cover? Let me know! I will gladly do the research and provide any information I can.


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Guest Tuesday, 20 November 2018
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