Virginia workers’ compensation insurance

Each state has different workers’ compensation laws, and in Virginia, workers’ compensation insurance is mandatory for all employers with three or more employees.

In addition, companies that hire contractors to perform regular job tasks or to fulfill a contract must count those individuals when determining how many employees they have for workers’ comp purposes.

The Virginia workers' compensation state law has a broad definition of employee. Coverage is mandatory for employees, with no waivers or exemptions permitted.

The state considers all of the following to be employees for workers’ comp purposes:

• Full-time or part-time workers
• Corporate officers and managers of limited liability companies (LLCs), even if they’re not actually performing job duties for pay
• Family members that work for the business
• Employees who work on a temporary or seasonal basis
• Immigrants or workers who are being trained
• Workers younger than age 18
• Employees working for nonprofit organizations such as churches, charities, and others

Even when it's not required, buying a workers' compensation policy is a smart financial move. Your health insurance company might deny a claim for an injury related to your work, which could leave you responsible for costly medical bills. That's why someone who's self-employed might choose to buy workers' comp.

As for when it's required, it depends on your ownership status. Sole proprietors who have no employees and who don’t use subcontractors do not need to buy workers’ compensation insurance for themselves. Sole proprietors, unlike in many other states, don’t need to file an exemption or waiver form with the Virginia Workers’ Compensation Commission (VWC).

If you’re an executive or corporate officer at your firm, the state considers you to be an employee for workers’ comp purposes. However, it gives you the right to reject insurance coverage. To elect this provision, you must:

• Have valid workers’ comp coverage for your firm’s other employees
• File a Rejection of Coverage form with the Virginia Workers’ Compensation Commission
• File a copy of the form with your insurance company

The same rules apply if you’re an LLC member, but they don’t apply if you’re an executive non-compensated officer of a tax-exempt 501(c)(3) corporation.

Independent contractors in Virginia are not required to have workers’ comp coverage. However, if the state determines the employer / independent contractor work relationship is actually an employer / employee one, your business could face penalties and you would be required to provide coverage.

Indicators that a contractor is actually an employee include the employer:

• Controlling the work to be performed
• Being able to hire the person doing the work
• Being able to fire that person
• Paying wages to the person who completes the work

Employees who suffer a workplace injury or occupational disease are eligible for benefits under the Virginia Workers' Compensation Act.

Workers' compensation coverage pays for any medical expenses related to work-related injuries. It also covers part of the wages lost while the employee recovers. Medical treatment must be provided by an authorized doctor for the employee to receive benefits.

Workers' compensation benefits [PDF] in Virginia include:

• Medical benefits that cover the cost of medical care for on-the-job injuries
• Temporary total disability benefits
• Temporary partial disability benefits
• Permanent partial disability benefits
• Permanent total disability benefits

For example, if an IT tech or software developer is diagnosed with carpal tunnel syndrome due to keyboard overuse, your workers' comp policy would pay for their medical bills, including long-term medication and physical therapy.

Or, if an employee at your IT consulting firm trips in the office stairwell and suffers a concussion, then your workers' comp policy would pay for their ambulance ride and emergency room visit.

Policies usually include employer's liability insurance, which helps cover legal expenses if an employee blames their employer for an injury. The exclusive remedy [PDF] provision in most workers' comp policies prohibits an employee from suing their employer once they accept workers' comp benefits.

Virginia business owners can compare quotes and purchase a policy from private insurance companies. TechInsurance offers this service with its online insurance marketplace.

Virginia employers who qualify can self-insure their workers' compensation claims. This means they’ll pay for their own workers’ comp claims rather than submit them to an insurance company. To qualify for self-insured status, they must:

• File an application
• Submit audited financial statements for the last three years in business
• Provide a claims run that shows all closed and open claims within the last three policy years
• Pay a $200 filing fee

Other ways to obtain workers’ comp insurance in Virginia:

• Join a licensed self-insurance group association
• Retain workers through a Professional Employer Organization (PEO) licensed in the state of Virginia

If you’re unable to purchase workers’ comp insurance through any of the above means because of your firm’s high-risk status, you can purchase coverage from the Virginia Assigned Risk Market. Administered by the National Council on Compensation Insurance (NCCI), it is the state’s workers’ comp insurer of last resort.

Violating the Virginia workers’ compensation statute is a serious offense. If you fail to comply, you may be assessed a civil penalty of $250 for each day you fail to maintain insurance, up to a maximum civil penalty of $50,000.

A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that resolves a workers’ compensation claim. This benefits both the employee and the employer.

In Virginia's workers' compensation system, many claims end in settlements. This means the parties in the claim – the injured worker, the company, and the insurer – agree on a lump-sum payment in return for the employee (or the employee’s survivors) agreeing to forfeit future benefits.

The settlement agreement, which must be a written document signed by the injured or ill worker or survivors, a representative of the employer, and the insurance company, must be filed with the Virginia Workers’ Compensation Division and approved by one of its judges. The settlement application must include:

• A petition describing the terms of the deal
• A notarized affidavit showing that the employee (or survivors) understand the settlement terms
• A medical statement summarizing the employee’s current condition
• A statement of the employee’s attorney fees
• A proposed settlement order

In Virginia, workers’ comp settlements do not require an official hearing before an administrative judge.

In Virginia, employees with injuries must file a workers’ comp claim no later than two years after the injury. The state will not offer an extension if you discover an injury or illness after the claim deadline.

If you are ready to explore workers’ compensation coverage options for your Virginia business, TechInsurance can help small business owners compare business insurance policy quotes with one easy online application. Start an application today to find the right insurance coverage at the most affordable price for your business.