Utah Workers’ Compensation: Laws, Providers & Costs

Utah workers’ compensation insurance laws require that most businesses with at least one employee maintain a valid policy to protect injured employees from the expense of medical bills and to pay lost wages. The average workers’ compensation policy in Utah costs 78 cents per $100 of payroll when averaged across all industries in the state.

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What Are Utah Workers’ Compensation Insurance Requirements?

Utah requires most businesses to maintain workers’ compensation for employees, defining an “employee” as anyone who is in direct service of an employer. It doesn’t matter if the employees were hired illegally or are minors working for the business. All employees must be covered with few exceptions.

Furthermore, Utah offers employers an “exclusive remedy” when they maintain workers’ compensation. This means injured employees cannot sue the company for workers’ compensation-related incidents. In return for giving up their right to sue, injured employees get workers’ compensation benefits regardless of whose fault the injury is.

Who Doesn’t Need Workers’ Compensation Insurance in Utah?

Even though the law says that most employers need to carry workers’ compensation, there are exceptions for certain types of employees. When an exception exists, employers don’t need to obtain insurance but may do so for added protection. Some common exceptions to Utah workers’ comp requirements are:

• Businesses with no employees
• Some agricultural employees
• Casual employees
• Domestic or household employees
• Some real estate and insurance brokers who work on commission
• Independent contractors

Sole proprietors and independent contractors may want to obtain coverage to protect themselves against the cost of injuries and lost time at work. It is possible for these individuals to obtain self-employed workers’ compensation if they don’t have employees.

Does Utah Workers’ Compensation Cover Out-of-State Employees?

Employees who are stationed outside of Utah for six months typically are covered by their employers’ workers’ compensation insurance. Employers can extend this initial coverage for another six months by notifying the Utah Labor Commission Industrial Accident Division, the government body that administers workers’ comp in the state. Employees who are permanent residents of another state need to comply with that state’s workers’ compensation requirements.

Where Can I Obtain Workers’ Compensation Insurance in Utah?

Utah has a competitive landscape when it comes to getting workers’ compensation insurance. There is also a state fund, the Workers’ Compensation Fund of Utah, but this is considered an insurer of last resort for high-risk and high-claim companies. Instead, business owners should look for insurance through private insurance carriers licensed to offer workers’ comp in the state.

Top Workers’ Compensation Insurance Insurers in Utah

CommercialInsurance.net

Buying workers’ comp insurance often requires completing applications with multiple providers to find the best rate. CommercialInsurance.net eliminates that step by offering a simple application and then shopping your information to more than 200 top insurance carriers, brokers, and agencies. Because CommercialInsurance.net works with so many insurance companies, it can usually get the best price a carrier can offer.

The Hartford

As a small business insurance expert, The Hartford offers workers’ compensation, plus other key commercial policies, including business owner’s policies (BOPs) and professional liability. Its policies are underwritten with your small business in mind, understanding the most common risks associated within given industries. The Hartford is particularly cost-competitive when it comes to Utah professionals who work in office environments.

Liberty Mutual

Want to keep your business and personal insurance needs in one place? Liberty Mutual is a superb option with home, auto, and a whole host of commercial insurance products from which you can choose. Its workers’ compensation insurance policies are most attractive for moderate-risk companies, such as foodservice businesses, where employers expect some claims but have the right safety plan in place to reduce insurance costs.

Chubb

Chubb is a major business insurance carrier with offices throughout the United States and around the world. You can get just about any type of business insurance with Chubb, including workers’ comp, general liability, and property coverage, along with cybersecurity risk and professional liability. You’ll appreciate Chubb in the claims process when a registered nurse is the case manager, helping injured workers navigate a claim to faster recovery saving everyone money.

Insur-West Insurance Advisors

Insur-West Insurance Advisors is a Utah-based broker with more than 30 years of experience helping business owners in the Beehive State find the right business insurance. In addition to workers’ comp, it offers property coverage and commercial liability, often combined into BOPs for small businesses. The company’s professionals take the time to advise business owners on the potential risks their specific businesses face and have the experience to help all clients navigate Utah’s workers’ comp requirements.

Can Businesses Self-insure in Utah?

Utah business owners have the option to self-insure workers’ compensation if they meet the guidelines set forth by the Utah Labor Commission Industrial Accidents Division. While self-insurance eliminates the cost of workers’ compensation premiums, it does have high financial thresholds for eligibility. For instance, the company must:

• Have been in business for at least five years
• Maintain a net worth of at least $10 million
• Maintain one of the top two ratings from Dun & Bradstreet
• File a surety bond or cash deposit based on risk
• Carry excess workers’ compensation coverage

While it is possible to self-insure in the state, the requirements make it nearly impossible for most small to midsized businesses (SMBs) to qualify.

How Much Does Utah Workers’ Compensation Insurance Cost?

In Utah, the average cost of workers’ compensation insurance across all industries is 78 cents per $100 of payroll, according to data from The National Academy of Social Insurance. This means that the average business owner pays $780 for every $100,000 in payroll.

The cost of workers’ compensation is determined by more than one factor. Insurers consider the type of work your employees do, the amount of payroll you spend, and the workers’ comp claims you’ve filed in the past. The equation to calculate premium divides payroll by $100 then multiplies this number by both the rate assigned to the job classification code and a claims rating called an experience modification rate (EMR).

Sample Utah Workers’ Comp Rates by Class Code

Utah Workers’ Compensation Insurance Cost Example

As an example, let’s look at a Salt Lake masonry company. This company has four masons and one clerk. The payroll total for the masons is $200,000 for the year, and for the clerk, it’s $35,000.

First, find the rate for both positions class code in the table above:

• Masons: $3.34 (class code 5022)
• Clerk: 7 cents (class code 8810)

Now we plug this data into the premium equation to get premium estimates for both the masons and the clerk.

• Masons: ($200,000 / $100) x $3.34 = $6,680
• Clerk: ($35,000 / $100) x 7 cents = $24.50

The reason for such a big difference is that clerks work in an office, so they have much less risk than a mason, who is around heavy materials and tools all day.

Once we have the work class premium estimates, we’ll add them together to get a total estimate: $6,680 + $24.50 = $6,704.50

Remember. this is just the starting point. This premium estimate is adjusted further based on the company’s EMR. Usually, the EMR is one for brand new companies because they have no claims, and it remains one for the first three years. If the company starts having workers’ comp claims, then its EMR may go up, which causes the premium to go up too.

Utah Workers’ Comp Audit Requirements

The premium obtained in the equation, as accurate as the class code and EMR are, will always only be an estimate when the policy begins. The reason is that employers can’t know exactly how much they will spend on payroll for the 12 months of the policy term. This is why insurers conduct a premium audit at the end of each workers’ comp policy term.

The audit reconciles the estimated payroll with the exact payroll to make sure employers pay the appropriate premium. When businesses overestimate their payrolls, they receive a refund check after the audit. However, when payroll is underestimated due to new hires or unexpected overtime, business owners receive a premium bill that is due prior to the next policy renewal. The payroll from the audit is used to estimate the next policy’s premium.

What Does Workers’ Compensation Insurance in Utah Cover?

Workers’ compensation insurance pays benefits to an employee who is injured on the job or contracts a work-related illness. In Utah, worker’s comp insurance benefits include:

• Medical: This pays for reasonable and necessary medical treatments, including emergency room (ER) care, doctors’ visits, medication, physical aids, and physical therapy. Employers or their insurers select the physician for the initial visit, but employees can request a change after that.
• Temporary disability: Workers are entitled to a portion of their wages after a compensable injury. Indemnity payments for a temporary total disability cover two-thirds of the injured worker’s average weekly wage, up to a predetermined maximum. Temporary partial disability benefits are the difference between two-thirds of the average weekly wage and the current wage, plus $5 for a dependent spouse and each dependent child.
• Permanent disability: Indemnity payments for both a permanent total and a permanent partial disability cover two-thirds of the injured worker’s average weekly wage. However, the duration of permanent partial disability payments depends on the injury, and permanent total disability payments go on as long as the injured employee cannot work.
• Death benefits: Dependent beneficiaries can receive up to 312 weeks of indemnity payments for a worker who died as a result of his work injuries. Burial expenses of up to $9,000 will also be paid.

To get indemnity payments, workers must meet the three day waiting period and have benefits starting to be paid the following week. If they are out of work for at least 14 days, they will be paid for the first three days of the waiting period as well.

If the injured worker retains an attorney, the attorney ‘s fees are capped at:

• 20% for the first $15,000
• 15% for the next $15,000
• 10% for the remaining balance

The maximum attorney’s fee is $10,850.

Utah Workers’ Compensation Coverage Example

Pete is a delivery driver for a floral company. While on his route, his box truck is hit from behind, causing Pete to get severe whiplash. He phones his employer and goes to the ER. The ER doctor prescribes pain medication and rest, but Pete wants to be more active with his care and wants to go to a chiropractor.

He phones the insurance carrier and gets the name of an approved chiropractor. Pete sees the chiropractor and is back to work after 10 days. All of Pete’s medical bills, including his chiropractic care, are covered by the insurance carrier. He also receives indemnity payments for the days he was out of work, minus the three-day waiting period. If Pete had been unable to work for 14 days, his employer’s insurer would compensate him for the first three days as well.

What Are the Penalties for Not Having Workers’ Compensation Insurance in Utah?

Employers are held to strict adherence to state workers’ compensation laws. Failure to follow them can result in various penalties, including:

• A minimum of $1,000 fine
• Legal injunction to stop doing business in the state
• Loss of “exclusive remedy” that protects employers from being sued by injured employees

How Do I File a Workers’ Compensation Claim in Utah?

It’s important to note that both employers and employees have responsibilities in the reporting and processing of workers’ comp claims in Utah. It’s in an employee’s best interest to notify an employer immediately following a work-related injury or an incident that could lead to injury. However, employees have 180 days to report injuries to employers to prevent any negative consequences on the claim.

Employers then complete the Employer’s First Report of Injury or Illness (Form 122e) and provide copies to their insurance carriers and injured employees. This form notes the:

• Date and time of the incident
• People involved
• Circumstances leading to the incident
• Nature of the employee’s injuries
• Witnesses to the event

The insurance carrier (or the employer if self-insured) then has 14 days to file a First Report of Injury or Illness (Form 122c) electronically with the Industrial Accidents Division via its electronic data interchange. Insurance carriers must mail a copy of this form to the injured worker on the same day it’s submitted to the Division. Carriers then have 24 hours to decide to accept or deny the claim or request additional information. Injured workers should also see a form titled Injured Workers’ Rights and Responsibilities (Form 100) with the forms explaining the carrier’s decision.

During the claim, it is likely that the employee will receive the required paperwork to document the progress of his rehabilitation. Things such as doctor’s progress reports must be completed timely to ensure the claim is not denied or closed early.

Utah Workers’ Compensation Deadlines

Utah workers’ compensation benefits are paid as long as injured employees adhere to the deadlines imposed by the state. Key workers’ compensation deadlines for Utah employees include:

• 180 days to provide notice of the injury
• One year to file a claim for medical or death benefits
• Six years to file an application for a hearing regarding temporary or permanent disability benefits

Failure to meet the deadlines could result in a claim being denied. Employees are encouraged to report incidents immediately to prevent this and get the care they need.

Utah Workers’ Compensation Resources

• Contact Information
  • Utah Labor Commission Industrial Accidents Division
    160 E. 300 S., Third Floor
    Salt Lake City, UT 84114-6600
    801-530-6800
    laborcom@utah.gov
• Key Forms
  • Employers First Report of Injury or Illness (Form 122e)
  • First Report of Injury or Illness (Form 122c)
  • Physician’s Initial Report of Work Injury or Occupational Disease (Form 123)
  • Injured Workers’ Rights and Responsibilities (Form 100)
• Publications
  • Employers’ Guide to Workers’ Compensation
  • Employees’ Guide to Appealing a Workers’ Compensation Claim Denial

Bottom Line

Utah requires that all employers, with few exceptions, must have valid workers’ compensation insurance protecting their employees. While looking for affordable workers’ comp can be time-consuming, employers without coverage face penalties that include the closure of the business.

Don’t get lost in multiple applications when looking for workers’ compensation insurance. CommercialInsurance.net is a marketplace where you will be paired with the best insurance provider for your needs. It’s partnered with more than 200 insurance carriers, brokers, and agencies to bring affordable workers’ compensation to small business owners. Get a free quote in minutes.

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