Kentucky Workers’ Compensation

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What can be covered by Kentucky Workers’ Compensation insurance?

Medical expenses

Medical expenses

Like exams, treatment and rehabilitation.
Lost wages

Lost wages

For employee recovery after a work injury.


To teach injured employees new skills if they can no longer do their jobs.
Permanent injury

Permanent injury

Benefits for employees who can no longer work due to injury.

Table of Contents

Is KY Workers’ Comp insurance required?

Workers’ compensation insurance is required for all Kentucky employers with one or more employees, according to the Kentucky Education and Labor Cabinet. In this state, executive officers of corporations are also considered to be employees.

In KY, workers’ comp helps business owners and employees. It can protect employers against some unexpected costs and help cover expenses for injured workers. Some of the key benefits provided by workers’ compensation insurance include:

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

How does Workers’ Comp work in Kentucky?

Workers’ compensation insurance provides coverage for expenses related to injuries that occur on the job, such as:

  • Medical expenses
  • Loss of wages
  • Temporary or permanent disability
  • Survivor benefits

Kentucky policies generally cover the following income benefits tied to workers’ comp:

Temporary total disability: 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.

Permanent partial disability: 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.

Permanent total disability: 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.

Under certain conditions, a Kentucky workers’ compensation insurance policy will provide coverage for work injuries that occur outside 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.

Learn more about workers’ compensation coverage.

How much is Kentucky Workers’ Comp?

Workers’ compensation costs vary across industries. Factors that influence price include:

  • The number of employees and the type of work they do
  • Your total payroll
  • Your insurance claims history
  • The locations where you do business

The best way to determine the insurance rate for your business is to get a free instant quote from NEXT.

What if you don’t have Workers’ Compensation in Kentucky?

Employers who fail to obtain the required workers’ compensation insurance 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.

Who is exempt from Kentucky Workers’ Compensation insurance?

Some employees are considered exempt from Kentucky’s workers’ comp requirement. These employees include:

  • Agricultural employees.
  • Domestic servants in a home with less than two employees who work less than 40 hours per week.
  • Professionals employed to do maintenance, repair or remodeling work in a private home for no more than 20 consecutive work days.
  • Individuals performing services in return for aid or sustenance from a religious or charitable organization.
  • Voluntary carpool drivers.
  • Certain religious organizations.

Employees in Kentucky also have the option to willingly sign forms that forfeit their rights to workers’ compensation benefits. For example, a corporate officer may choose to reject their coverage.

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, business owners are still required to have coverage for employees.

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:

  • Proof of assets of at least $10 million.
  • Certified, audited financial statements for the last three years.
  • Posted security for a minimum of $500,000.
  • Excess insurance with a minimum coverage limit of $10 million per occurrence.

How NEXT helps Kentucky small business owners

NEXT offers an easy way to get a free workers’ compensation insurance quote, purchase coverage and instantly share a certificate of insurance in about 10 minutes.

NEXT strives to resolve every claim quickly. Learn more about our claims process and how our claims advocates will work with you after an employee injury.

Start a free instant quote with NEXT.

Other important business insurance policies in Kentucky

Workers’ compensation insurance provides many important protections, but you’ll need additional coverage to protect from all the risks your small business can face.
Many Kentucky small businesses also consider:
General Liability
General Liability insurance

General liability insurance protects your business from common mistakes or accidents, such as customer injury or damages to someone’s property.

Commercial Auto
Commercial Auto insurance

In Kentucky, all business-owned vehicles must be covered by commercial auto insurance. If you drive or use your personal vehicle for work, commercial auto insurance helps protect your business from accidents.

Commercial Property
Commercial Property insurance

Commercial property insurance can provide financial help if your business structures, goods, gear or inventory are damaged or destroyed by a covered event.

Errors & Omissions
Professional Liability insurance

Professional liability insurance, also called errors & omissions insurance, provides financial protection against claims of professional mistakes and negligence.

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* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.