Jump ahead to learn:
- Is Workers’ Compensation insurance required in Virginia?
- How does Workers’ Comp work in Virginia?
- What could Virginia Workers’ Compensation coverage include?
- Workers’ Comp exemptions in Virginia: Who qualifies?
- How much does Workers’ Comp insurance in Virginia cost?
- Workers’ Comp Virginia FAQ
- How ERGO NEXT helps protect Virginia business owners
Is Workers’ Compensation insurance required in Virginia?
Workers’ compensation insurance in Virginia is required for any business that regularly employs three or more employees — full-time, part-time, seasonal, temporary, minor, trainee, immigrant or family member. Under Virginia workers’ compensation laws, as soon as you regularly have three or more workers on payroll, coverage is mandatory with no exceptions and no waiver forms available. Employers must also post a workers’ comp notice in the workplace so employees know their rights.
One important nuance for contractors: if you hire subcontractors who are performing the same trade, business or occupation as your company, their employees count toward your total when determining whether coverage is required — even if those subcontractors carry their own workers’ comp policies. That means if you have one employee and a subcontractor with two employees, your total headcount under Virginia law is three, and you’re required to carry coverage.
Virginia also requires state-specific coverage for all work performed in the Commonwealth, including temporary or out-of-state work. Virginia does not have reciprocity with any other state, so a policy from another state is not sufficient. Most out-of-state employers can add Virginia coverage via an endorsement.
Proof of coverage may also be required by contractors and clients before they’ll work with you. ERGO NEXT lets you generate unlimited certificates of insurance (COI) at no extra cost, directly from your account.
How does Workers’ Comp work in Virginia?
When a work-related injury or illness happens, Virginia workers’ comp provides a structured process for getting your employee the care and benefits they need — while protecting your business from most personal injury lawsuits tied to that injury.
Here’s how the process works, per the Virginia Workers’ Compensation Commission (VWC or VWCC):
- Report the injury. Your employee should report any work-related injury or illness to you as soon as possible. Virginia law requires that injuries be reported promptly — ideally within 30 days of the accident — and employees should notify you before seeking non-emergency medical care so you can direct them to an authorized physician. As the employer, you must notify your insurance carrier promptly and report the incident to the VWCC within 10 days for injuries causing more than one day, shift or turn of lost work; minor injuries may be reported within 60 days.
- Get medical care. The employer has the right to select the initial authorized treating physician. For a first visit or in an emergency, your employee can see any provider. After that, care should be directed through the panel of physicians you’ve established or authorized. You must provide your employee with the names of at least three physicians to choose from at the time of the accident.
- The insurer reviews the claim. Your insurance company reviews the claim and determines what benefits apply based on the nature and severity of the injury. Virginia operates as a no-fault system, so benefits can generally be paid regardless of who caused the work-related accident.
- Benefits are paid. If the claim is accepted, the insurer coordinates payment for authorized medical treatment, as well as lost wage benefits starting from the eighth day of disability.
- The employee returns to work or receives ongoing benefits. Once your employee is medically cleared, they return to their role. If the injury results in a permanent impairment or prevents them from returning to work, permanent disability benefits may apply for up to 500 weeks — or for life in the case of permanent total disability.
Virginia workers’ comp operates under an “exclusive remedy” rule: when your employee receives workers’ comp benefits, they generally waive the right to sue you for claims related to that injury. As a business owner, you also can’t share the cost of workers’ comp premiums with your employees or deduct it from their wages — the full premium cost is your responsibility.
If you run a retail shop in Richmond and one of your employees fractures their wrist, workers’ compensation could help pay for their hospital visit, follow-up medical appointments and lost wages while they recover.**
What can Virginia Workers’ Compensation coverage include?
Workers’ comp can help pay for expenses related to work-related injuries or illnesses for your employees — and optionally for you as a business owner.
If one of your employees is injured on the job, a Virginia workers’ comp policy can help pay for:
- Emergency treatment medical expenses
- Lost wages (wage loss benefits)
- Death and survivor benefits
- Vocational retraining if they can no longer do their job
- Permanent injury or disability benefits
Workers’ compensation doesn’t cover incidents that aren’t job-related, or situations involving intentional self-injury, employee misconduct, violations of company policy, or impairment from drugs or alcohol.
Virginia Workers’ Comp income benefits
Virginia workers’ comp income benefits depend on the nature and severity of the injury. There’s a seven-day waiting period before benefits begin — though if the disability lasts 21 or more days, that first week is reimbursed retroactively. Here’s how each type works:
- Temporary total disability (TTD): Employee can’t perform any work while recovering; receives 66 2⁄3% of their average weekly wage, up to a maximum set by the state. Benefits can continue up to 500 weeks.
- Temporary partial disability (TPD): Employee returns to work at reduced wages; receives 66 2⁄3% of the difference between their pre-injury wage and current earning capacity, subject to the TTD maximum. Benefits continue up to 500 weeks.
- Permanent partial disability (PPD): Employee has a lasting impairment to a specific body part; benefits are calculated based on the impairment rating multiplied by the scheduled number of weeks for that body part under the Virginia schedule.
- Permanent total disability (PTD): Employee is permanently unable to perform any type of work; receives ongoing weekly benefits at the 66 2⁄3% rate for life, with no 500-week cap.
Workers’ Comp death benefits in Virginia
If a covered employee dies from a work-related injury or illness (and death occurs within nine years of the injury), Virginia death and survivor benefits provides the following to eligible dependents:
- Weekly compensation equal to 66 2⁄3% of the deceased employee’s average weekly wage — subject to the same maximum and minimum as other wage benefits — paid for up to 500 weeks from the date of injury.
- A surviving spouse receives benefits until they remarry or die.
- Dependent children are covered until age 18 (or 23 if enrolled full-time in an accredited institution).
- Burial and funeral expenses are covered up to $10,000.
- Transportation expenses for the deceased are covered up to $1,000.
- If there are no wholly dependent survivors, partial dependents may receive up to 400 weeks of benefits.
Workers’ Comp exemptions in Virginia: Who qualifies?
Virginia’s workers’ comp requirement comes with very few exceptions. There are no waiver forms and no blanket exemptions for any type of business. Here’s what you need to know:
- Businesses with two or fewer employees (not counting subcontractor workers) aren’t required to carry coverage. But the moment you regularly have three or more workers — including part-time, seasonal or temporary workers — the requirement kicks in.
- Sole proprietors with no employees aren’t required to carry workers’ comp for themselves. However, if you’re a sole proprietor with even one employee, the subcontractor counting rule may apply. Note that the Commonwealth of Virginia counts you — the business owner — as an employee under workers’ comp law, as do family members working in your business.
- Executive officers and LLC managers can elect to reject coverage for themselves by filing the appropriate election with the VWC. This opt-out only applies to the officer or manager — it doesn’t reduce the employer’s obligation to cover all other employees.
- Agricultural employees.
- Domestic service employees (household workers).
- Casual employees.
Important: Virginia doesn’t provide waivers or exemption forms for sole proprietors or any other business that isn’t required to carry coverage. An employer that isn’t legally required to carry workers’ comp may still choose to purchase it voluntarily — and doing so can protect the business from civil suits if an employee is injured.
How much does Workers’ Comp insurance in Virginia cost?
Workers’ comp insurance costs in Virginia vary across industries and businesses. Some factors that influence what you’ll pay for workers’ comp in Virginia include:
- Your total payroll.
- The type of work your employees do and their assigned class codes.
- Your number of employees.
- Your insurance claims history and workplace safety record.
- The locations in Virginia where your employees work.
The best way to find out what coverage will cost for your business is to get a free quote from ERGO NEXT.
