Rhode Island workers’ compensation insurance regulations require any employer in the state with at least one employee to maintain valid coverage. This is to protect employees who may suffer injuries or illnesses because of their work. The average rate paid across all Rhode Island employers is $1.09 per $100 of payroll. However, rates vary based on your industry and claims history.
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What Are Rhode Island Workers’ Compensation Requirements?
Rhode Island employers must obtain workers’ compensation insurance prior to any employee starting their job assignments, according to the Department of Labor and Training (DLT). The state defines an employee as a person who works under a contract of service or apprenticeship for a business and includes most corporate officers. Even one employee, whether full- or part-time, triggers this mandate.
Rhode Island is referred to as a “no-fault” state, meaning an employee receives benefits for a compensable injury regardless of who caused the injury. In exchange for these benefits, employees can’t sue their employers if their employers properly adhere to the workers’ comp regulations.
Who Doesn’t Need Workers’ Compensation Insurance in Rhode Island?
While regulations vary by state, most allow for some exemptions. In Rhode Island, the government exempts the following from workers’ comp requirements:
- Municipal employees, unless the municipality has chosen to be covered
- Sole proprietors
- Independent contractors
- Certain real estate, agriculture, and domestic employees
Sole proprietors without employees do not have to get a policy, but they may voluntarily obtain self-employed workers’ compensation for themselves.
Tip: Business owners should make sure any independent contractors they hire have submitted a Notification of Designation as Independent Contractor (DWC 11-IC) to the DLT to indicate the contractor is not entitled to workers’ comp benefits. If the independent contractor has employees, then the business owner should ask for proof of workers’ compensation insurance.
Where Can I Obtain Workers’ Compensation Insurance in Rhode Island?
Most Rhode Island businesses obtain workers’ compensation through private carriers who are licensed to sell insurance in the state. It is also possible to self-insure. Those who don’t qualify for either private insurance or self-insurance can obtain workers’ compensation through the state’s assigned risk pool managed by Beacon Mutual Insurance Company.
Top Rhode Island Workers’ Compensation Insurance Companies
CommercialInsurance.net is an online insurance marketplace that connects small business owners to top-rated carriers like Liberty Mutual. Because it has a large stable of insurance partners, CommercialInsurance.net can often find workers’ comp for companies that often struggle to get covered, including new businesses, high-risk businesses, and businesses with prior claims. Its services are free, and business owners often find they get the carriers’ best price when they work with CommercialInsurance.net.
The Hartford is a major player in the United States small business insurance market and has a very large appetite for workers’ compensation policies. Its workers’ compensation coverage is broader than most of its competitors, providing coverage that others usually charge extra for automatically. This includes coverage for reasonable expenses if you have to assist in a claim and for employees who aren’t entitled to benefits under state law.
Liberty Mutual might be best known for quirky television commercials for its home and auto insurance policies, but small business owners would be well-served to check it out for commercial insurance, particularly workers’ compensation. This carrier focuses on reducing the likelihood of claims by offering safety webinars, assistance from safety specialists, and self-assessments and other materials to all of its workers’ comp policyholders.
Chubb is an international powerhouse when it comes to commercial insurance, and it has simplified the underwriting process to the extent that business owners can purchase certain policies, including workers’ comp within minutes online. Moreover, Chubb employs real nurses to serve as case managers on claims. This has proven to expedite the rehabilitation process while keeping claims costs and premiums down.
biBERK is fully owned by insurance giant Berkshire Hathaway, and its goal is to reduce small business insurance costs by reducing the role of agents and brokers. As a result, biBERK sells directly to businesses, reducing costs by as much as 20%. Those who want the protection of a big name without the high price can feel secure when they purchase a biBERK policy.
Can Businesses Self-insure in Rhode Island?
It is possible for Rhode Island businesses to self-insure, though many do not meet the requirements set forth by the state. Companies that want to self-insure must meet the following minimum qualifications:
- Pay an application fee of $300 to $500 depending on the number of employees
- Pay annual assessments based on the percentage of premium that would have been paid based on manual rates
- Purchase excess liability insurance with an upper minimum coverage limit of $10 million
- File a minimum security deposit of $500,000 or two times the average incurred liability of state operations, whichever is higher
These requirements make it nearly impossible for most small and midsized businesses (SMBs) to qualify for self-insurance.
How Much Does Rhode Island Workers’ Compensation Insurance Cost?
In Rhode Island, the average workers’ compensation insurance policy across all industries is $1.09 per $100 of payroll, according to a report from the National Academy of Social Insurance. What this means is that for every $100,000 in payroll paid, the average business owner can expect to pay $1,090 in annual insurance premiums for workers’ comp.
However, what the average owner pays may be very different from what you pay. Workers’ compensation insurance premiums vary widely for a variety of reasons. The primary reason is that the equation to determine premium factors in a business’ payroll divided by $100, the amount of risk its employees face (represented by its class code), and its claims history. These factors are specific to each business, so the cost is also specific to each business.
Sample Rhode Island Workers’ Compensation Rates by Class Code
Industry Class Code
7208 Towing Company
8742 Sales Professional
8810 Clerical - Office
8824 Nursing Home
8831 Animal Shelters
9063 Fitness Center
Rhode Island Workers’ Compensation Cost Example
To better understand how workers’ comp premiums are determined, let’s consider an example. Assume a landscaping company has six landscapers with a total payroll of $300,000 and one office clerk with a payroll of $35,000.
Using the table above, the classification codes for the employees are:
- Landscapers: 0042
- Clerk: 8810
By taking the low rate for each of these, we can calculate the premium for each classification:
- Landscapers: ($300,000 / $100) x $4.71 = $14,130
- Clerk: ($35,000 / $100) x 13 cents = $45.50
The reason there’s such a big difference in cost is that landscapers are more likely to get injured compared to a clerical worker sitting at a desk. To get the total estimated premium, we add the two together: $14,130 + $45.50 = $14,175.50.
For many businesses, this estimate is then multiplied by an experience modification rate (EMR), which is assigned to the company based on its claims history. All companies start with an EMR of 1, so it doesn’t affect the premium. After three years, the EMR is adjusted annually based on the business’ claims. A higher EMR means the company has had more claims than others in the industry.
Rhode Island Workers’ Comp Audit Requirements
Every business that has a workers’ comp policy should expect an annual premium audit. This is to reconcile the estimated payroll to the actual payroll for the 12 months of the policy term. The premium is adjusted depending on what the audit finds.
If payroll was underestimated—perhaps because you hired more people or had a lot of overtime—you are billed for the difference. If you overestimated payroll, you would receive a premium refund. The payroll information uncovered by the audit is then used to estimate the next 12 months of premium.
What Does Workers’ Compensation Insurance in Rhode Island Cover?
Rhode Island workers’ comp insurance covers costs and lost wages when employees are hurt or get ill because of their work. Policies pay for:
- Medical bills: Coverage for emergency care, doctors, dentists, physical therapists, and treatment by spiritual means
- Total disability payments: Payments of up to 75% of an employee’s spendable base wage if the employee is unable to work again
- Partial disability payments: Payments made when an employee can work in some capacity after an injury; these are 75% of an employee’s spendable base wage minus the employee’s current earning capacity
- Dependency allowance: Weekly payments of $15 to an employee’s dependents if the employee suffers a total disability; dependents on an employee who dies from their injuries receive $40 per week
- Death benefits: Payments made to a surviving spouse or dependents for the amount determined by temporary disability benefits
- Burial expenses: A payment of $20,000 for funeral and burial expenses of employees who died as a result of injuries
In Rhode Island, injured employees have the right to choose their medical provider, hospital, or dentist. If injured employees are working, they might not be entitled to compensation benefits. There is a three day waiting period before compensation benefits are paid while medical benefits commence immediately.
Rhode Island Workers’ Compensation Coverage Example
While at work, Jennifer lifts a box of client documents and throws out her back. She cannot stand straight and is in a significant amount of pain, so she notifies her boss and immediately goes to an emergency room (ER). An MRI shows she has a slipped disc, and the doctor prescribes pain medication and three weeks of rest, totaling 18 working days off.
The ER visit, prescription medication, and follow-up visits are paid for by her employer’s workers’ comp insurance. Once the three-day waiting period is over, Jennifer can collect 75% of her spendable base wage.
What Are the Penalties for Not Having Workers’ Compensation Insurance in Rhode Island?
Rhode Island imposes strict penalties for employers that violate the state law of required workers’ comp insurance. They include:
- $250 fine for not displaying the required workers’ comp poster
- $1,000 for each day without required workers’ comp insurance
- $10,000 felony charge for failing to provide coverage
Additionally, business owners could face up to two years in prison and are subject to business closure by the Rhode Island Department of Labor and Training.
How Do I File a Workers’ Compensation Claim in Rhode Island?
Both employees and employers have responsibilities in the claim reporting process. Employees must tell an employer about an incident within 30 days, although the law recommends doing so immediately to get medical attention. When notifying employers, employees should record:
- The date and time of the incident
- The circumstances leading up to the incident
- Details about the injury, if known
- The names of any witnesses to the event
Once notified, employers must file a claim with their insurers. The insurers then must file a First Report of Injury Form (DWC-01) electronically by the DLT no later than 10 days from when the employee suffered the injury or reported an incident. If the injury resulted in death, this timeline is accelerated and must be completed within 48 hours.
During the claims process, employees will receive paperwork from the insurance company. Any forms that are sent will have a corresponding deadline. Failure to provide these documents by the deadline could result in a denied claim or a prematurely closed claim.
Rhode Island Workers’ Compensation Deadlines
Employees have time limits that must be met to have a valid workers’ comp claim. The first deadline is the notice to the employer that, while recommended to be done immediately, must be completed within 30 days. This notice identifies an incident that could have led to injury or illness. From there, the employee has a two-year statute of limitations to file a claim from the date of the incident. There is a three-day waiting period employees must meet before getting disability payments paid.
Rhode Island Workers’ Compensation Resources
- Contact Information
- Key Forms
- Online Information
Rhode Island’s very strict rules regarding workers’ compensation insurance are designed to protect workers injured on the job. Not abiding by the rules can lead to both civil and criminal penalties that can include jail time, so getting coverage is of the utmost importance for employers.
CommercialInsurance.net can be a huge help in finding the policy that fits your business. The company has partnered with more than 200 carriers, brokers, and agents, so it can pair you with the best insurance provider for your needs. Get a free quote in minutes.