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In nearly every U.S. state, employers are required by law to carry workers’ compensation insurance. Since laws surrounding coverage are written at the state level, each state has different rules and requirements.
Workers’ compensation is one of many small business insurance types all Rhode Island entrepreneurs should consider.
In this article, we’ll explain workers’ compensation laws in Rhode Island—who you need to cover, who is exempt, and possible penalties for non-compliance.
How does workers’ compensation insurance in Rhode Island work?
In Rhode Island, employers must obtain coverage as soon as they have one employee, unless said employee is exempt from coverage.
Employers can purchase coverage through the private insurance market. Large companies can also self-insure, provided they’ve been in business long enough and can prove they have substantial financial resources.
Who needs workers’ compensation insurance in Rhode Island?
Most employees are required by law to be covered under their employer’s workers’ compensation policy. There are, however, a few exceptions:
- Sole proprietors
- Independent contractors
- Municipality employees (police, firefighters, school district employees)
- Certain real estate workers
- Certain agricultural employees
- Certain domestic workers
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 Rhode Island?
Purposefully skipping out on workers’ compensation coverage is a felony in Rhode Island. It can carry up to 2 years in prison and a fine of $1,000 for each day of non-compliance. Beyond criminal penalties, non having insurance means leaving your business vulnerable to lawsuits should one of your employees get injured or become ill on the job. You could end up owing your employees even more than they would have gotten from a workers’ compensation claim.
How much does workers’ comp insurance in Rhode Island cost?
On average, employers in Rhode Island pay $1.09 annually per $100 in covered wages.
What does workers’ comp cover?
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.
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.
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.
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.