Workers' Comp Insurance FAQ

It's insurance, required by state law in nearly every state, that pays an injured employee's medical bills and a portion of lost wages on a no-fault basis. In exchange, the employer generally receives protection from being sued directly over the injury.

Yes. Workers' compensation, workman's comp, workmen's compensation, and work comp all refer to the identical coverage. The terminology shifted over time as legal drafting became gender-neutral, but no state treats the terms as legally distinct.

No. Coverage is scoped to injuries and illnesses arising out of and in the course of employment. An injury unrelated to job duties, even if it happens during work hours, generally isn't compensable under the policy.

In most states, yes — coverage is required starting with the first employee, including part-time workers and family members. A handful of states set the threshold at two to four employees instead, so check your specific state's rule.

Generally yes. Most states count part-time, seasonal, and temporary workers the same as full-time employees when determining whether you've crossed the threshold that triggers mandatory coverage.

Generally no. A sole proprietor or single-member LLC with no staff typically isn't required to carry coverage, though many elect it voluntarily, often because a client or general contractor requires proof of coverage regardless of the legal minimum.

Yes, for private employers. Texas allows businesses to become 'non-subscribers,' though they must notify the state and employees and lose certain common-law legal defenses if sued over a workplace injury.

Payroll for each class code is converted into a rating base and multiplied by that code's rate, producing a base premium that's then adjusted by your experience modification rate, any schedule credits or debits, and applicable state assessments.

Class code assignment typically has the largest impact, since each code reflects the historical injury risk of that specific type of work, followed by total payroll and your experience mod.

Not usually. They rely on national average rates and a generic industry category, without your actual class codes, state-specific rating data, or experience mod — all of which meaningfully affect your real premium.

Your FEIN, business structure, estimated payroll broken out by class code, total employee count, and prior coverage history including loss runs if available. Ownership details also matter if you plan to exempt any officers.

Yes. A single application can be run against up to ten carriers we have access to, returning a ranked comparison rather than requiring you to reapply separately with each one.

Yes. Once you select a carrier from your comparison, you can typically complete the purchase, including any required signatures and payment setup, without a separate paper application process.

It's a summary document, typically an ACORD 25 form, showing your carrier, policy number, coverage dates, and limits. It's proof that coverage existed on the date it was issued, not the policy itself.

Traditionally it requires contacting your agent and waiting. Our Live Certificate Program provides an always-current certificate you can share by text or email in seconds, included with every policy at no extra cost.

To confirm workers' comp coverage is active before letting a vendor's crew on a job site. Without it, the general contractor risks being treated as the employer of an uninsured worker if there's an injury.

It's a four-digit code describing the type of work employees perform, used to determine the rate applied to their payroll. Codes are assigned based on actual job duties, not job titles.

NCCI maintains the class code system in most states. Independent bureaus — including NJCRIB, NYCIRB, PCRB, DCRB, WCIRB, CAOM, WCRIBMA, and NCRB — maintain their own systems in their respective states.

It's the class code representing the largest share of a business's total payroll when more than one code applies, treated as the primary description of the business for certain rating and audit purposes.

Get them appropriate medical care immediately — call 911 for an emergency, or direct them to an approved provider for a non-emergency injury. Documentation and formal reporting come after their immediate needs are addressed.

Not immediately. Claims feed into your experience modification rate, which is recalculated periodically, so a claim typically doesn't show up in your rating until roughly a year or more later.

Yes, generally. Claims where the employee didn't lose significant time from work are typically weighted less heavily in the experience rating formula than claims involving wage-replacement benefits.

It's a revision to a previously calculated experience mod, made when new or corrected information becomes available, such as an updated claim reserve or corrected payroll data.

In most states, yes, if they're a qualifying corporate officer or LLC member with an ownership stake, by filing an exemption or election form with the state agency. Rules on eligibility and default status vary by state.

Possibly. A 1099 is a tax classification, not a workers' comp classification. If the subcontractor doesn't carry their own active policy, their pay can be added to your payroll at your next premium audit.