Workers’ compensation insurance is required for all Kentucky employers with one or more employees. In this state, executive officers of corporations are also considered to be employees.1
In KY, workers’ comp helps business owners and employees alike. It protects employers against some unexpected costs while also helping to cover expenses for injured workers. Some of the key benefits provided by workers’ compensation insurance include:
There are certain types of employees who are considered exempt from Kentucky’s workers’ comp requirement. These employees include:
Employees in Kentucky also have the option to willingly sign forms which forfeit their rights to workers’ compensation benefits. For example, a corporate officer may choose to reject their coverage.2
Kentucky workers’ compensation laws state that business owners may elect to be included as employees. These types of business owners include:
Regardless of whether they choose to extend workers’ comp coverage for themselves, these business owners are still required to have coverage for any employees they may have.3
Extending coverage to business owners is often a smart move financially.
For example, if you own an appliance repair business and you injure your back while moving an oven, you may rack up medical bills as the result of your injury and miss out on income during your recovery time. If you have workers’ comp insurance, it could help cover the costs of your medical care and lost wages.
Kentucky employers may be eligible to self-insure their company for workers’ compensation rather than obtaining an insurance policy. The application requirements for becoming self-insured include:
Workers’ compensation insurance provides coverage for expenses related to injuries that occur on the job, such as:
For example, if one of your restaurant employees gets burned while working in the kitchen, workers’ compensation insurance could help pay for the costs of their medical care as well as the lost income until they can return to work.
There are certain income benefits tied to workers’ comp. Kentucky policies generally cover the following categories for income benefits:4
These benefits are paid to an employee whose physician states that they are unable to return to some type of work for more than seven calendar days.
This type of income benefit may be paid to employees who, despite reaching maximum medical improvement, still have a permanent impairment that affects their potential wage earning capacity.
These benefits are reserved for employees whose injuries result in a complete and permanent inability to perform any type of work.
Death benefits are also available if an employee dies within four years of the date of injury and as a direct result of the injury. This includes a lump sum payment to the employee’s estate for covering burial expenses as well as income benefits for a surviving spouse and certain dependents.
Employers who must have insurance according to KY workers’ comp laws are also required to post a notice in a conspicuous location in the workplace. This notice informs employees of their rights, provides directions on how to obtain assistance and includes specific details about the employer’s insurance carrier.5
Under certain conditions, a Kentucky workers’ compensation insurance policy will provide coverage for work injuries that occur outside of the state. Generally, if the workers’ employment is primarily located within Kentucky, but they occasionally travel for specific work purposes, the same coverage will apply.
Business owners with employees who regularly work out of state should check with their insurance carrier to verify whether coverage extends to employees while outside Kentucky.
Employers who fail to obtain the required workers’ compensation coverage are subject to a fine of $100 to $1,000 per employee. These fines can add up quickly since each employee and each day of non-compliance constitutes a separate offense.
If an employee gets injured on the job while the employer does not have coverage, the employer can also be held liable for benefits the worker would otherwise receive through workers’ comp, including medical expenses and lost wages.
A number of factors affect the rates for workers’ comp. Kentucky insurance carriers typically look at the following when calculating premiums:
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Workers’ compensation insurance is essential for most Kentucky businesses, but you’ll still need to get additional business insurance in Kentucky to make sure you are protected from the risks you face as an employer.
Here are a few options to consider adding to your custom business insurance package:
General liability insurance provides protection for some of the most common business risks, such as expenses related to property damage or customer injuries..
Professional liability insurance provides financial protection against claims of professional negligence. If you make a mistake on the job, it can also help cover the costs to fix it.
You’ll need commercial auto insurance if you or your employees drive for work-related purposes. This insurance protects your business from unexpected expenses resulting from involvement in an accident.