Workers' Compensation Insurance

Workers' compensation and Justworks

This article is intended to convey the basics of workers’ compensation. Workers’ compensation rules and terminology vary from state to state.  If you have questions about a specific policy or claim, you should contact a lawyer or your workers’ compensation insurance provider.

What is workers’ compensation insurance?

Workers’ compensation insurance (commonly known as workers’ comp) is provided to employees whose injuries or illness arise out of the course and scope of their employment. An employee's beneficiaries may also receive benefits in a situation where a claim involves the death of an employee.

Workers’ comp provides disability benefits and medical benefits.  Disability benefits compensate workers for time missed from work and in the case of permanent disability, they may provide compensation for future lost earning capacity. Medical benefits provide medical treatment and rehabilitation treatment for covered injuries.  

Is workers’ comp required?

Workers’ comp is required for all employees in all states pursuant to the laws of each state. Once you sign up with Justworks, you’ll pay workers’ comp-related charges for all of your employees.

If your business is required to have workers’ comp coverage and does not, you could be liable for fines and penalties. States routinely audit businesses to ensure that appropriate coverage is in force.

Check out our Workers' Compensation Insurance Primer to learn about what workers' comp covers, which businesses are required to have it, what the benefits are, how charges are calculated, and more.

ND, OH, WA, and WY have “monopolistic” workers’ comp policies

In these four states, workers’ comp policies are issued by an agency of the state government. In Washington, premiums are charged directly as a payroll tax, although you are still required to apply for coverage. As such, renewal of these policies should be handled directly with the workers’ compensation agencies in these states.

What is covered by workers' comp?

On a basic level, workers' comp covers injuries employees sustain on the workplace premises or anywhere else (e.g., if traveling for work-related purposes) while acting in the course and scope of their employment. In addition to injuries from accidents, workers' comp covers injuries employees may sustain from other events that may occur while they are working, including workplace violence, terrorist attacks, and natural disasters. Workers' comp insurance also covers certain illnesses and occupational diseases contracted as a result of employment. For example, an employee who works with toxic chemicals and becomes ill from exposure to those chemicals may receive benefits.

Workers' comp does not cover injuries sustained from accidents while driving to and from work. It also won’t necessarily cover injuries that, while sustained at the workplace, are not within the course and scope of employment. For example, if you’re a graphic designer, and you bring your unicycle to the office and ride it down the stairs, your claim may be denied since the injury is unrelated to your job.

I work in an office, do I still need workers' comp?

Offices aren’t typically very dangerous, so why does the state require workers’ comp insurance for office workers? Well, even office employees have a substantial number of claims. However, since office jobs are obviously less dangerous than most other jobs, the charges for employees doing office work are lower than most other class codes.

How does workers' comp work when you're using a PEO?

A Professional Employer Organization (PEO) provides workers’ comp insurance and related administration services for its customers.  Workers’ comp is a key component of what a PEO does. As mentioned earlier: if you have workers, you need workers’ comp.

How does workers' comp work when you're using Justworks.

As a PEO, we are the employer of record for administration purposes of all employees on our platform, so they all must be on our workers’ comp policy, provided that they work in a state that does not administer workers’ compensation at the state level. That is a requirement of working with Justworks. It also means you don't need to deal with it! Every time you make a payment through the system, we automatically calculate your workers' comp charges and display them on your invoices. If you have a covered claim, it will be on our master policy and we’ll help you sort everything out. We'll also take care of the annual renewals.

What if I already have workers' comp insurance?

To work with Justworks, you would need to cancel your existing policies in all states without monopolistic coverage. Justworks requires all companies on our platform with employees outside of those states to be covered through our workers’ comp policy. Since it is illegal to have multiple policies covering the same employee, companies on our platform need to cancel their existing policy as well.

Justworks can provide proof of coverage for customers

Your Justworks plan includes workers’ comp coverage and as such, we are able to provide you with a certificate of insurance (COI) as necessary. Your COI is available in your company’s ‘Documents’ Center and if you need a specific certificate holder listed, you can reach out to our support team and they will be able to assist.

Additionally, our workers’ comp carrier will provide you with posting notices at the start of your policy as well as each year, when the policy renews. These notices are sent to each office location (but not to remote employees). You are required to display and maintain these posters in the workplace, where all employees can clearly and easily see them.

Helpful to know: workers’ comp is issued for a company, not a person

Even if your business has only unpaid owners and partners but no employees, your business may be required to have workers’ comp. You should consult your attorney or insurance broker for how this affects you and your business.

Does my policy last forever?

On Justworks, your workers’ comp policy renews annually in June.

Do I need to do anything during the renewal process?

No action is required to renew your policy as this is all handled by Justworks. We will keep you updated throughout the process and send you communications.  Additionally, Justworks will provide you with updated certificates of insurance (COI) and posting notice. As a reminder, you are required to display and maintain these posters in the workplace where they are clearly visible to all employees.