Conifer Insurance Services

Why Your Business Needs Workers’ Compensation Insurance

Workers’ Compensation Insurance

Much like liquor liability, Workers’ Compensation Insurance is required by most states, but each state is in charge of their own workers’ compensation program regulations. Generally speaking, an employer’s responsibility to provide coverage may depend on the number of employees at the business, the type of business, and the type of work they are doing. In 2015, American employers paid out $61.9 billion in workers’ compensation benefits; let’s hope they all had coverage so that didn’t come out of their pockets. 

What is Workers’ Compensation Insurance?

Workers’ Compensation Insurance protects a business and its employees by providing the employees’ benefits if they get a work-related injury or illness. These benefits can cover missed wages, medical expenses, vocational rehabilitation, and death benefits. For the employer, it helps cover legal costs if an injured employee or their family sues the business. Workers’ compensation is applied regardless of who is at fault, whether it’s an employee, the employer, co-workers, or even customers. Although it is not required by some states it is highly recommended to have coverage and plan for what could happen, instead of having to do damage control when the unplanned does happen. 

Why Do You Need It?

First, check what your state requirements are for workers’ compensation are, but coverage is required by nearly every state in the U.S. If an employer chooses to ignore the requirement for insurance, the state can fine them which can be very expensive and in many cases even include jail time. Here in Michigan, the fine can be up to $1,000 per day without coverage and possible jail time. At the end of the day workers’ compensation is a mandatory safeguard for businesses and their employees.

Michigan’s Workers’ Compensation Requirements

Businesses operating inside Michigan that meet the following criteria must have workers’ compensation insurance:

  • All private employers regularly employing 1 or more employees 35 hours or more a week for 13 weeks or longer during the preceding 52 weeks.
  • All private employers regularly employing 3 or more employees at one time. (This includes part-time employees)
  • Agricultural employers if they employ 3 or more employees 35 hours or more per week for 13 or more consecutive weeks.
  • Householders employing domestic servants if they employ anyone 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks.
  • All public employers

If your business falls under these categories or if you have other questions regarding workers’ compensation in your state we are always here to help. Our Workers’ Compensation Insurance program is a stand-alone and added-on product focused on well-managed small to mid-sized main street risks. 


The loss control suggestions and information contained on this blog is being provided on an advisory basis only. Conifer Insurance Company and its employees make no warranties, expressed or implied, and assume no liability whatsoever for services, products, or loss control measures provided by any service providers. Contact your local, independent insurance agent for insurance coverage advice and policy service.

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