Workers’ comp is required by law in most states, and Virginia employers must carry a policy once they regularly employ more than two employees. The average cost of workers’ compensation insurance in Virginia is 74 cents per $100 of payroll.
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What Are Virginia Workers’ Compensation Requirements?
Workers’ comp requirements vary by state. In Virginia, employers must carry workers’ compensation when they have more than two employees. State law defines employees as part-time, full-time, seasonal, and temporary workers as well as minors, trainees, immigrants, and working family members. Corporate officers and limited liability company (LLC) managers are also considered employees even if they aren’t performing regular work or earning a regular salary.
Virginia workers’ compensation laws state the following:
- Employers must cover subcontractors’ employees: A business that hires subcontractors to fulfill a contract or assist in the same business or trade it performs needs to include the subcontractor’s employee in their workers’ compensation
- Sole proprietors do not have to get coverage for themselves: Sole proprietors aren’t compelled to get coverage, but they may opt for workers’ comp for self-employed individuals
- LLC members aren’t usually considered employees: That may change if the member performs work and earns pay; additionally, LLCs with a single member may elect to cover that member
- Employee status is determined by the relationship: Calling a worker an independent contractor does not impact an employer’s workers’ comp requirement; if the employer has control, then the worker is an employee and must be covered
- Out-of-state employers must follow Virginia law: Companies based in other states but with employees in Virginia need to comply with Virginia’s workers’ compensation laws; this is true even if the employment is temporary
- Out-of-state employees are covered by Virginia law: Workers in other states are covered by Virginia’s workers’ comp act if their contract was made, or the employer is located in Virginia; however, injured workers can choose where to file their claim
Additionally, operators of underground coal mines are never exempt from supplying workers’ compensation insurance. They must get coverage even if they have only one employee.
What Injuries Does Virginia Workers’ Compensation Insurance Cover?
Workers’ compensation insurance covers injuries resulting from work-related activities. This means if someone gets hurt from a fall, collision, or is injured from machinery, they would have their injuries paid for by the workers’ comp policy.
Virginia’s definition of injuries and illnesses means its workers’ comp usually doesn’t cover injuries resulting from repetitive trauma. For instance, employees who suffer bad backs or carpal tunnel need to demonstrate work activities directly caused their injury. Employees who suffer from preexisting conditions must also prove that their work directly aggravated their condition to qualify for workers’ comp benefits.
Where Can I Obtain Workers’ Compensation Insurance in Virginia?
Virginia employers have four options for getting workers’ comp insurance. They can use a commercial carrier, their professional employment organizations, a self-insurance group, or self-insure. If they are declined by two organizations, they can get coverage through an assigned risk group set up by the state to ensure all employers get workers’ comp.
Top Virginia Workers’ Compensation Insurance Providers
*Liberty Mutual quote provided by our partner Commercialinsurance.net.
The Hartford’s basic workers’ compensation policy is the right choice for employers who want broad affordable coverage. It has six unique features, including coverage for exempt employees and volunteers’ payments for reasonable expenses like overtime for an employee giving a deposition. Virginia employers can get discounts by paying their premium in full or buying multiple policies from The Hartford, plus they can have their workers’ comp in place in just five minutes after quoting
AP Intego merges advanced technology and experienced insurance professionals to make buying workers’ compensation easy for small business owners. The company’s top industries include trades, foodservice, and allied health, but its access to top insurers allows them to write workers’ comp for additional professions. Quotes appear in seconds, and employers can have their premiums adjusted automatically when they hire and fire, so the correct premium is deducted from their payroll every month.
Liberty Mutual is a top provider of workers’ compensation insurance in Virginia, holding the second-largest market share in the state. Perhaps the best reason to work with Liberty Mutual is their proactive attitude toward workers’ compensation insurance claims. The company’s workers’ comp claims professionals specialize by the coverage and can connect you to the appropriate medical and legal resources. These services mean care for your workers better, which can get them back at their jobs sooner rather than later.
*Liberty Mutual quote provided by our partner Commercialinsurance.net.
Employers is a national carrier that only offers workers’ compensation insurance. Virginia employers can draw on its experience by using the company’s loss control resources. In addition to workers’ comp coverage, policyholders can get a hazard analysis, take part in management and supervisory safety programs, and provide employee safety presentations and training for no extra cost. Since insurers consider your claims history when setting your premium, Employers is the best choice for business owners who want to improve safety and reduce their rates.
WorkerCompOne is an online broker-focused solely on workers’ compensation insurance. Its partnerships with quality carriers like CNA and Travelers let it provide coverage in the 46 states that allow commercial insurers, including Virginia. Big-name providers don’t typically write policies for small businesses, but WorkCompOne has relationships that make them an ideal provider for small business owners with 10 or fewer employees.
Virginia Workers’ Compensation Insurance Alternatives
In addition to commercial providers, Virginia employers have three options for getting workers’ compensation insurance. They can choose to self-insure, work with a professional employer organization, or form group self-insurance associations.
In addition to using a private insurer, Virginia employers can get workers’ comp in these ways:
- Self-insurance: Employers who self-insure need to complete an application from the Virginia’s Workers’ Compensation Commission and provide three years of audited financial statement, three years of claims history, and minimum security of $750,000
- Professional employer organization (PEO): Some PEOs maintain workers’ compensation insurance for their co-employees; the PEO takes out a master workers’ comp policy in its name
- Group self-insurance association (GSIA): Two or more employers who have a common interest can form a GSIA to pool their liabilities; this requires a license from the State Corporation Commission and excess insurance
How Much Does Workers’ Compensation Insurance Cost in Virginia?
On average, Virginia employers pay 74 cents per every $100 of payroll, according to the National Association of Social Insurance. Virginia workers’ compensation costs are determined by three factors: work risk, payroll, and loss history. Every employee’s work is classified by risk and assigned a rate. The rate is then multiplied by total payroll and an experience modifier.
The basic formula for determining workers’ comp premiums is:
Payroll (per $100) X classification rate X experience modifier rate (EMR) = Premium
The EMR, or e-mod, is a number that insurers use to represent how a business’s payroll and loss history compares to similar-sized businesses in the same industry. Businesses with an e-mod under one typically have fewer or less expensive claims, and that translates into lower premiums. E-mods also explain why premiums vary between insurance providers. Each insurer had its own method for evaluating risk and creating e-mods.
Workers’ compensation class codes are four-digit numbers that represent businesses with similar operations and, therefore, similar risks. Each code gets a base rate, with riskier businesses starting at a higher rate than businesses with less risk.
Sample Virginia Workers’ Compensation Rates by Class Code
Industry Class Code
5183 Plumbing Contractors
7225 Towing Company
8742 Sales Professional
8810 Clerical - Office
8824 Retirement Living
8831 Animal Shelters
9063 Fitness Center
Virginia Workers’ Compensation Cost Example
Different job classifications within the same business can be rated differently when it comes to the workers’ comp class code. Assume an animal shelter has 10 employees: eight who work with the animals and two office workers. Using the table above, we can see that the general class code for animal shelters (class code 8831) is $1.06 per $100 of payroll while the office workers (class code 8810) is only 7 cents per $100 of payroll.
If the animal care providers earned $200,000 collectively, and the clerks earned $50,000, the premium calculations would look like this:
- Animal shelter worker: $1.06 x $200,000/$100 = $2,120
- Office clerks:7 cents x $50,000/$100 = $35
Add those together, and the total premium annually is estimated at $2,155. However, the business may also have an e-mod, and that could cause its premium to go up or down depending on its claims history.
In the News
Because Virginia follows guidelines set by the National Council on Compensation Insurance (NCCI), employers who have halted operations due to COVID-19 but continue to pay employees may be able to exclude those employees’ pay from their workers’ compensation premium calculations. Check with your insurer if this impacts your costs.
Virginia Workers’ Compensation Audit Requirements
Workers’ compensation insurance premiums are largely based on how much you pay employees and the type of work they do. Because those numbers may fluctuate throughout the policy term, insurers conduct audits to make sure businesses pay the right premiums. They may even audit businesses that have closed or who have dropped their coverage. Premiums audits can result in employers owing more money or getting money back.
Business owners can prepare for their premium audit by gathering documents including:
- Payroll register
- State and federal quarterly tax reports
- Federal 1099, W2, and W3 transmittals
- Overtime payroll records
- Employee records like timecards and position descriptions
- Information about payments made to subcontractors and casual laborers
What Benefits Does Virginia Workers’ Compensation Insurance Provide?
Virginia workers’ compensation insurance benefits provide coverage for work-related injuries. Employees can expect to have medical expenses and lost wages paid, among other coverage benefits. Key coverages include:
- Medical expenses: Pays ambulance, emergency room, hospital, and all medical expenses pertaining to the work injury or illness
- Rehabilitation expenses: Pays for physical therapy as prescribed by the attending doctor to restore the patient back to the best possible condition
- Wages while out injured: Provides employees’ wages up to 66.67% of the average weekly wage with a maximum and minimum amount set by the state
- Long-term disability: Settles long-term disabilities based on the level of injury up to 66.67% of employee’s average weekly wage
- Death benefits: Pays dependents up to 66.67% of the deceased workers’ average weekly wage for up to 500 weeks and up to $10,000 in funeral expenses
Virginia workers’ compensation policies also include employer’s liability coverage. This covers costs for legal fees associated with potential business liability in the claim or fighting fraudulent claims. The minimum limits for employer’s liability in Virginia are:
- $100,000 per occurrence for bodily injury or illness
- $100,000 per employee for bodily injury or illness by occupational disease
- $500,000 per policy for bodily injury or illness
Virginia Workers’ Compensation Coverage Example
Joe is a machinist and is injured gravely while working. He is rushed to the hospital in critical condition, where he is on life support for a week before succumbing to his injuries. The workers’ compensation insurance pays all of Joe’s medical expenses and pays his surviving spouse $666.67 per week as this is 66.67% of his average weekly wage of $1,000. She also receives $10,000 in funeral expenses.
What Are the Penalties for Not Having Workers’ Compensation Insurance in Virginia?
Virginia employers who fail to carry workers’ compensation insurance can face civil penalties of up to $250 for each day of noncompliance, up to a maximum of $50,000. Additionally, noncompliant employers can be charged with a misdemeanor for intentional violations, held liable for employee compensation, and be forced to stop operations.
Employers may also face penalties for:
- Failing to report workplace injuries, illnesses, and death: This can result in civil fines of $500 per violation and misdemeanor charges for willful violations.
- Allowing employees to contribute to workers’ compensation insurance costs: Violations can result in fines of up to $100 each, plus the employer may have to return any money an employee contributed.
Whether they have workers’ compensation insurance or not, employers are responsible for covering injured employees’ medical bills, and replacement wages. Uninsured employers may be sued by insured employees seeking the appropriate compensation.
How Do I File a Workers’ Compensation Claim in Virginia?
Employees carry most of the burden when it comes to filing a workers’ comp claim, but employers have responsibilities too. The entire process goes more smoothly if both employers and employees work together.
The steps for filing a workers’ compensation claim in Virginia include:
- Employee should report their injury or illness immediately no later than 30 days from the date of the occurrence or the date the doctor diagnoses your illness as work-related
- Employee receives a Jurisdiction Claim Number (JCN and a PIN to access their file online
- Employer files a report of the injury or illness with the Virginia Workers’ Compensation Commission.
- Employer provides three doctors for the employee to seek medical attention from. Employees may not change doctors without employer or insurance carrier consent.
- Employees must cooperate with rehabilitation counselors and accept or seek employment when released to light duty.
Virginia Workers’ Compensation Deadlines
Virginia employers also need to be aware of two important deadlines related to workers’ comp in Virginia. Missing these deadlines can result in fines and even criminal charges if the court decides the violation was intentional.
Here are key Virginia workers’ compensation insurance deadlines:
- 10 days to report workplace accidents, injuries, and deaths: Employers must file a First Report of Injury form with the state’s commission within 10 days of learning about job-related injury, death, or accident
- 60 days to report minor workplace injuries: Injuries are minor if the employee can return to work within seven days, has medical bills less than $1,000, does not suffer death or permanent disability or disfigurement, and their claims are not disputed or denied
Employees have responsibilities that may help business owners meet their deadlines. For instance, an injured employee has 30 days from the date of the accident to notify their employer in writing. They also must file their workers’ comp claim with the commission within two years. For work-related illnesses, the clock starts running at the date of diagnosis.
Virginia Workers’ Comp Resources
- Contact Information
- Key Forms
- Useful Links
Virginia law doesn’t require business owners to get workers’ compensation insurance until they have more than two employees. However, the state’s definition of employee is rather broad, so some employers may need coverage and not know it. Virginia business owners should review the requirements and work with an agent to get workers’ compensation.
The Hartford is an ideal solution for Virginia business owners looking for workers’ comp. Not only does it specialize in small business insurance, but it offers discounts and savings programs to help make the policy more affordable.