Employers with four or more employees are required to carry workers’ compensation insurance in the state of South Carolina. Workers’ comp protects employees who get injured or ill from activities or circumstances related to work. The most recent data shows that employers can expect to pay an average of $1.66 per $100 of payroll in premiums depending on their industry and claims history.
What are South Carolina Workers’ Compensation Requirements?
In South Carolina, workers’ compensation is mandatory for any employer who has at least four employees. It doesn’t matter if the employees are full- or part-time, adults or minors, or seasonal workers. If an employer has four or more employees, then they must obtain workers’ compensation insurance or face penalties and fines.
Additionally, a subcontractor’s employees are technically employees of the general contractor. This means general contractors can be held liable for the subcontractor’s employees even if the general contractor is not required to carry workers’ comp for his business.
Who Doesn’t Need Workers’ Compensation Insurance in South Carolina?
Just about all employers need to carry workers’ compensation insurance, but South Carolina state law does exempt some employees, including those who work for:
- Agricultural, railroad, and railway companies
- Businesses with an aggregate payroll of less than $3,000
- The Textile Hall Corporation
Business owners also don’t have to cover commissioned-based real estate agents or casual workers.
Casual worker: Casual workers are employees who are only guaranteed work when an employer needs their services. When casual employees are not working, they have no obligation to their employers, and their employers have no obligation to them.
Sole proprietors, limited liability company (LLC) members, and business partners do not have to carry workers’ compensation for themselves, but they can opt into coverage. Conversely, corporate officers are included but may opt out by submitting a Corporate Officer Notice to Reject form with the business’ workers’ comp insurer. Other than the named exceptions, all other employees must have workers’ compensation insurance provided by the employer.
Where Can I Obtain Workers’ Compensation Insurance in South Carolina?
Business owners can get South Carolina workers’ compensation insurance from private carriers licensed in the state, or they can try the state fund. Workers’ compensation state funds typically provide affordable coverage for businesses that have been denied policies in the private insurance market.
Top Workers’ Compensation Insurance Insurers in South Carolina
Professional service companies that work in office settings
Light to medium-size construction companies
Restaurant and food industry businesses
Businesses in marine industries
Hard-to-place businesses with high claims
The Hartford is a leading provider of private workers’ compensation insurance. Their robust workers’ comp is popular with small business owners because it provides coverage automatically for reasonable expenses and extended reporting deadlines. Business owners who want to keep all their insurance in one spot can purchase workers’ compensation, along with many other business owners’ policies with The Hartford.
CommercialInsurance.net is a referral service that partners with more than 200 national insurance carriers to make sure it can offer its clients the best policies for the best price. In a matter of minutes, business owners can complete the online form and get paired with the right carrier based on their industry, claims history, and premium. Construction companies in particular should work with Commercialinsurance.net because of its ability to get business owners the best possible price.
Liberty Mutual is known as a personal lines insurance carrier offering home and auto insurance to people across the country, but it also has a complete offering of business insurance, including workers’ compensation. Its focus is the small business owner and tries to work with common service industries to get the right-priced policy written. Restaurant owners should consider Liberty Mutual for its risk control resources and ability to close claims quickly.
Travelers Insurance offers workers’ compensation with a claims mindset. They have one of the biggest networks of care providers for businesses to help employees get healthier faster after an injury. By partnering with the small business owner, Travelers Insurance can help businesses mitigate claims with safety programs.
South Carolina State Accident Fund
The South Carolina State Accident Fund was established in 1943 to help business owners get a proper workers’ compensation policy where they might be denied by private carriers. It competes against private carriers and is the largest provider of workers’ compensation insurance in the state, serving nearly 600 employers. Administered by the National Council on Compensation Insurance, the fund can offer coverage to businesses that have been denied having multiple claims.
How Much Does Workers’ Compensation Insurance Cost in South Carolina?
According to the data from the National Academy of Social Insurers, South Carolina businesses pay $1.66 per $100 of payroll for workers’ compensation insurance. Your business may be above or below the average based on several factors, including your risk, claims history, and insurance carrier. The table below shows how rates vary based on job classification called an industry class code.
Industry Class Code
5183 Plumbing Contractors
7605 Alarm Installation
8810 Clerical - Office
8829 Nursing Home
South Carolina Workers’ Comp Cost Example
We’ll look at a nursing home as an example in calculating workers’ compensation premiums. Assume that a small nursing home has 10 care workers on staff as well as two clerical aids. Each care worker is paid $65,000 per year for a total of $650,000 in annual payroll. The two clerks make a combined $80,000 per year.
First, let’s figure out how much it costs to insure the nursing home staff (class code: 8829) using the low rate of $1.96 per $100 of payroll:
$650,000/$100 x $1.96 = $12,740
Note that we did not include the payroll for the clerical workers. That’s because clerical workers (class code 8810) are both common across many industries and low-risk positions, so insurers typically separate them out when estimating premium:
$80,000/$100 x $0.14 = $112
Now, we add both totals to get the base premium:
$12,740 + $112 = $12,852
However, this is only the start of the nursing home’s workers’ comp premium. The next number factored in is the experience modifier rate, and it’s based on the nursing home’s claims history. If the nursing home had more claims than other, similar businesses, the experience modifier increases its estimated premium.
South Carolina Workers’ Comp Audit Requirements
Regardless of what insurance carrier you go with, you will be audited at the end of your policy term. This is because businesses may make significant payroll adjustments as they add or lose employees. The premium audit looks at the actual payroll and reconciles it with the estimated payroll used when establishing the workers’ compensation premium to rectify any gaps that might occur.
If your insurer determines your payroll is less than originally estimated, it issues a refund. However, it will send a bill for the difference if your payroll was underestimated. The audit also is used to determine the next term’s premium. Those who try to ignore the audit or the premium bill and look for another insurance carrier are often disappointed to find they are blacklisted from getting new insurance. The bottom line is the audit is required, and insurance carriers work together to ensure businesses don’t take advantage of the system.
What Does South Carolina Workers’ Compensation Insurance Cover?
Like policies in most states, South Carolina workers’ compensation covers employees who are injured or become ill through their employment. The insurance pays for medical bills associated with the injury or illness, a portion of the employee’s lost wages, and rehabilitative services needed to get healthy and capable of work. Additionally, if an employee dies from said injuries or illness, the insurance company pays funeral and burial costs.
It is important to note that South Carolina’s workers’ comp laws allow the employer to pick the medical provider that the injured employee goes to. While an employee has the right to go to any provider for medical care, benefits are not guaranteed unless the employer has given express prior permission to see that provider.
South Carolina Workers’ Compensation Coverage Example
Carol works for a small accounting firm as a clerk. One of her responsibilities is to deal with mail and deliveries. The office supply store delivers cases of copy paper, and Carol hurts her back while moving them in the supply room.
Based on South Carolina law, Carol is covered by workers’ compensation, but she must:
- Notify her employer as soon as possible but no later than 90 days from the date of the incident
- Must file a claim within two years from the date of the incident
Once she files the claim, her employer sends her to their chosen medical professional to address her pain. If Carol opts for a second opinion from a specialist in her health insurance network, the appointment is not covered by her employer’s workers’ compensation policy. Only the chiropractor is covered because Carol didn’t get prior approval for the second opinion. Carol can continue to see the chiropractor to treat her back and is paid disability payments for the weeks she is unable to work.
What Are the Penalties for Not Having Workers’ Compensation Insurance in South Carolina?
Not having valid workers’ compensation or failing to file a workers’ compensation claim properly can result in penalties to the business. For example, if a company does not have workers’ compensation insurance when an injury occurs, the state can seize company assets to pay the claim. There are also fines ranging from $50 to $200 for not adhering to the claims process properly. Fines can be levied for several errors like violating the medical rating rules for not completing a compensation report.
How Do I File a Workers’ Compensation Claim in South Carolina?
Employees start the claims process by notifying the employer within 90 days of the injury or up to two years to file a claim with the state. Once notified, the employer then has 10 days to report the injury to the South Carolina Workers’ Compensation Commission using the First Report of Injury (Form 12).
Employees may personally file a claim with the state if:
- Their employer fails to file a claim
- Their employer denies their injury was work-related
- They believe they’re entitled to more benefits
- The date of the incident
- What happened
- What injuries were sustained
Employers need to document the days the employee first missed work and provide an average weekly wage so that disability payments may be calculated.
South Carolina Workers’ Compensation Deadlines
While employees are required to notify employers as soon as possible, they must provide notice of injury or illness within 90 days. In addition, a claim must be filed within two years from the date of injury or illness.
There is a seven-day waiting period before disability payments start, but medical treatment should begin immediately as needed. Retroactive disability benefits are paid after 14 days.
South Carolina Workers’ Comp Resources
- Contact information:
South Carolina Workers’ Compensation Commission
P.O. Box 1715
1333 Main Street, Suite 500
Columbia, SC 29202-1715
- Key forms:
- First Report of Injury: Form 12 employers file with their insurance carriers
- Corporate Officer Notice to Reject: Form 5 filed with the carrier by the corporate officer who is opting out of coverage
- Employee’s Notice of Claim and/or Request for Hearing: Form 50 completed by the injured worker to initiate a workers’ comp claim with the state
- Employee’s Notice of Claim and/or Request for Hearing, Death Case: Form 52 completed by the surviving beneficiaries of a deceased worker
As a South Carolina employer, you need to understand whether you need to purchase workers’ compensation insurance or be subject to potential penalties and fines. Finding the right insurance carrier who can offer you the best pricing on a policy helps mitigate this necessary expense.
To help you, the folks at CommercialInsurance.net can shop policies among some of the top private insurance carriers in South Carolina to make sure you get the right policy for the best price. Don’t waste time calling around for quotes. With one form, CommercialInsurance.net will do all the running around for you. Get a free, no-obligation quote today.