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Workers Compensation insurance

Alaska Workers’ Compensation insurance

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Is Workers’ Compensation insurance required in Alaska?

All businesses in Alaska with employees must have workers’ compensation insurance.1 

Part-time and temporary employees must be included in a business’s workers’ comp coverage. However, coverage requirements do not apply to independent contractors and volunteers.

Getting workers’ comp coverage is important for two reasons. First, it’s required under the Alaska Workers’ Compensation Act. And second, workman’s comp insurance helps pay for a number of costs related to workplace injuries, such as:

  • Emergency treatment
  • Medical bills
  • Lost wages
  • Death benefits

Who is exempt from Workers’ compensation insurance in Alaska?

No businesses are exempt from the workers’ compensation requirements. However, certain business owners and executives do not have to obtain Alaska workers’ comp insurance for themselves, such as:

  • Sole proprietors 
  • Partners in a partnership
  • Limited liability company members with a minimum 10% ownership interest
  • Executive officers of for-profit corporations with a minimum 10% ownership interest
  • Executive officers of nonprofit corporations 

These business owners still need to have Alaska workers’ comp coverage for any workers they employ. If you work as an independent contractor, some clients may also ask you to have coverage.

Even if you work for yourself, you might still want workers’ comp as it covers lost wages and medical bills after a workplace accident. Your personal healthcare insurance might not cover you.

There are a handful of other exceptions to the workers’ compensation requirements that are determined by specific employment circumstances, including: 

  • Part-time babysitters 
  • Residential cleaning persons 
  • Sports officials
  • Some taxi cab drivers 
  • Real estate agents

Self-insurance for Alaska workers’ compensation

Employers have the option to self-insure their workers instead of obtaining a workers’ compensation policy. In order to do this, they must undergo a qualification process through the Alaska Workers’ Compensation Board.2

To obtain a Certificate of Self-Insurance for workers’ compensation, Alaska businesses must meet a number of requirements, including:

  • At least five years operating as a business in Alaska
  • 100 or more employees
  • Net worth of $10 million or more

Companies may submit an application if they meet the conditions for qualification. The application must include detailed documents and monetary commitments.

How does workers’ comp work in Alaska?

Workers’ compensation insurance helps pay for the costs of work-related injuries to employees and covered business owners, such as:

  • Medical expenses
  • Loss of income
  • Retraining
  • Permanent injury
  • Survivor benefits

For example, let’s say you own a cleaning company and one of your workers slips on a wet floor and injures their back. Workers’ compensation coverage could help pay for medical care, lost wages while recovering and even travel to and from medical treatments if necessary.

Workers’ comp income benefits in Alaska

There are four main categories for workers’ compensation income benefits in Alaska:3

Temporary partial disability

The employee is unable to earn their full regular wage while recovering, but is still able to work in a different and/or reduced capacity.

Temporary total disability

The employee is unable to work for a certain period of time due to their injury.

Permanent partial impairment

The employee sustains a permanent impairment and compensation is determined by a doctor’s impairment rating.

Permanent total disability

The employee’s injury limits their ability to perform any type of work on a consistent basis.

Additionally, death benefits apply when an employee dies as a result of a work-related injury or illness. This may include coverage for funeral benefits and monthly payments to a spouse and dependents.

Employer responsibilities for workers’ compensation insurance

In addition to obtaining workers’ compensation coverage for all employees, the Alaska Division of Workers’ Compensation requires employers to do the following:

  • Post notices of insurance for employees
  • Report employee injuries sustained in the workplace within 10 days
  • Pay for compensable occupational injury claims
  • Comply with workers’ compensation laws for any other states or countries where employees are sent to work

Alaska Workers’ Compensation insurance reciprocity

This state does not accept policies from other states to fulfill the requirement for workers’ comp. Alaska businesses must be insured by an in-state policy.

Out-of-state and foreign employers must obtain coverage for any labor that occurs in Alaska. All policies must be written by an insurer licensed by the Alaska Division of Insurance.

Workers’ Compensation laws for subcontractors

All contracting businesses must make sure any subcontractors working for them have satisfactory workers’ comp insurance. If a subcontractor is not insured, additional premiums can be added to the contractor’s policy to ensure coverage.

Ultimately, it’s the responsibility of the contracting business to make sure that all their subcontractors have the proper insurance. 

If you want to minimize your liability, you can require all subcontractors to provide proof of insurance and hold on to those documents in case of an audit.

Are there penalties for not having Workers’ Comp coverage?

If your business fails or refuses to obtain the proper worker’s compensation insurance, you could be served with a stop work order. 

A mandatory penalty of $1,000 per day applies if you violate the stop work order. Additional penalties of $10 to $1,000 per employee per day could be added to that fine.

The statute of limitations extends through the previous six years. That means your business could be penalized for lapses in coverage at any time during those six years. 

Your business is at serious financial risk if an employee injury occurs while you’re uninsured. The injured worker can file a claim against you and the Alaska Division of Workers’ Compensation Benefits Guaranty Fund. 

If the employer fails to pay, this fund covers the injury-related costs and then aggressively pursues full reimbursement from the responsible employer.

What are the rates for Workers’ Compensation in Alaska?

Rates for workers’ comp vary based on a number of factors. When determining the premiums for workers’ compensation insurance, insurers consider the following:

  • The risk of job-related injuries
  • Where you do business
  • Your insurance claims history
  • How many employees you have

How NEXT Insurance helps Alaska businesses

NEXT specializes in small business insurance and can help make sure you get the right coverage to satisfy Alaska workers’ compensation laws.

It only takes about 10 minutes to answer a few questions, review coverage options, purchase insurance and get your certificate of insurance.

If you need help at any point along the way, our team of U.S-based, licensed insurance advisors is ready to assist you.

Start a free instant quote with NEXT online today.

Other important business insurance policies in Alaska

In addition to workers’ compensation, Alaska businesses generally need a few other types of insurance in their insurance package, including:

General Liability insurance

General liability insurance offers protection for common accidents and mistakes on the job, like property damage or customer injuries. 

Professional Liability insurance (E&O insurance)

If you or an employee makes a mistake at work or a customer makes a claim against you, professional liability insurance provides the financial protection you need to defend yourself. 

Commercial Auto insurance

Commercial auto insurance provides coverage if you or your employees are involved in an accident in a business-owned vehicle. It can also provide coverage for accidents in your personal vehicle while being used for work-related purposes.

FAQ

How does Live Certificate work?
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When you log in to your account at the Next Insurance website, you’ll see an option to “Share Proof”. Clicking that will give you an option to either put in an email address and have us send your certificate, or copy a link which you can send to anyone you like that will take them to your Live Certificate.
How long will it take to get my policy after I buy?
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In case you purchase your policy online you will receive your policy documents via email within one business day of purchase. In case you purchase through an agent your agent will let you know when to expect your documents.
Can I add to or change my coverage?
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If you’ve expanded your business and need coverage for more kinds of work (or higher amounts of the same coverage), please let us know. One of our support agents can discuss your business's changing needs, and in most cases, we’ll be able to set you up with a new policy on the same day (so there will be no gaps in your coverage).

If you're a customer, your policy documents and changes can be accessed and managed in your online customer account.

The quickest way to talk to our U.S.-based customer service team is through chat.  You can reach us by clicking “chat with us” at the very bottom of the help center page.

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