In almost every U.S. state, employers are required by law to carry workers’ compensation insurance if they have a certain number of employees. If you’re a business owner in Indiana, you’ll need to purchase workers’ comp insurance if you have at least one employee that doesn’t meet the state’s exemptions criteria.

Workers’ compensation is one of many small business insurance types all Indiana entrepreneurs should consider.

In this article, we’ll go over who you need to cover, who is exempt, and possible penalties for non-compliance.


How does workers’ compensation insurance in Indiana work?


The state of Indiana requires you to carry workers’ compensation insurance as soon as you have one employee. Workers’ compensation coverage can be purchased via the private insurance market. Some larger employers can also qualify to become self-insurers.


Who needs workers’ compensation insurance in Indiana?


Nearly every employee in Indiana must be covered by workers’ compensation insurance. However, there are some types of employment that are exempt from mandatory coverage. Those employees include:

  • Casual laborers
  • Domestic workers
  • Agricultural workers
  • Sole proprietors
  • LLC partners

In addition to the above exemptions, there are also certain employee types that are ineligible for workers’ compensation coverage:

  • Trucking owner-operators
  • Railroad workers covered by Federal liability
  • Real estate agents working as independent contractors
  • Independent contractors
  • Volunteers
  • Youth sports coaches
  • College athletes on scholarships
  • Prison inmates

As a business owner or sole proprietor, you don’t have to purchase workers’ compensation insurance for yourself. That doesn’t mean you shouldn’t get coverage. Sustaining an injury or illness while performing your work can lead to sizable hospital bills, medical costs and a lengthy recovery period. Investing in workers’ comp for yourself could save you from a brutal financial setback.


What are the penalties for not having workers’ comp in Indiana?


If a business is found to be non-compliant by the Indiana Workers’ Compensation Board, it could face cease-and-desist orders as well as both civil and criminal penalties. Businesses unable to provide proof of in-force workers’ compensation insurance can be fined up to $50 per day for conducting operations without valid coverage. Failure to insure is also classified as a misdemeanor punishable by up to a year in prison and a $5,000 fine.


What does workers’ comp cover?

Medical costs

If one of your employees is injured or becomes ill on the job, workers’ comp can cover their immediate medical expenses such as ambulance rides, emergency room visits, x-rays, surgery and prescription medications.

For example, if a kitchen employee reaches into a sink and slices their hand on a broken glass, they might require medical attention. Workers’ comp could cover the costs of their emergency room visit, stitches and pain management prescriptions.

Lost Wages

Many work-related incidents can leave employees unable to work for several weeks or months. Workers’ comp can provide some relief for employees in the form of partial wage replacement.

If an employee breaks their foot in a work-related accident, they could end up stuck at home for multiple months. While they’re out of work, workers’ comp would cover some of their lost wages.

Ongoing Care

Some work-related injuries require long-term care such as physical therapy or pain management. Often, these injuries are more the result of repetitive workplace stress rather than a single traumatic incident. Chronic back issues for construction workers and carpal tunnel syndrome for office employees are two common examples of the types of workers who might receive ongoing care due to repetitive stress. If their claim is approved, workers’ comp can cover the costs associated with their ongoing care.

Death Benefits

If the unthinkable happens and an employee passes away because of a workplace incident, workers’ comp can cover funeral costs and other death benefits for the deceased worker’s family or beneficiaries.