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Nearly every U.S. state requires employers to carry workers’ compensation insurance. Since coverage laws are written at the state level, each state has different rules and requirements. Workers’ compensation is one of many small business insurance types all Utah entrepreneurs should consider.
In this article, we’ll explain workers’ compensation laws in Utah—who you need to cover, who is exempt, and possible penalties for non-compliance.
How does workers’ compensation insurance in Utah work?
In Utah, all employers must carry workers’ compensation insurance if they have at least one part-time, full-time, or seasonal employee. Individuals with no employees who work for employers as contractors may have the option to waive their rights to workers’ compensation coverage.
Most employers purchase insurance coverage via the private insurance market. Some employers can qualify to become self-insurers, but the requirements are hard to meet. To self-insure, a company must have a net worth of $10,000,000 and have been in business for at least five years.
Who needs workers’ compensation insurance in Utah?
Utah state law mandates that employers purchase insurance coverage as soon as they have one employee. Businesses with no employees may not have to purchase insurance for themselves if they sign a waiver, even if they’re contracted to work for another employer. Businesses with the waiver option are:
- Sole proprietorships with no employees
- Partnerships with no employees
- LLCs with no employees
- Corporations with no employees
- Independent contractors
Companies can apply for a Workers’ Compensation Coverage Waiver (WCCW) for a small one-time, non-refundable fee.
As a business owner or sole proprietor, you don’t have to purchase workers’ compensation insurance for yourself. However, 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 Utah?
In Utah, penalties for workers’ compensation non-compliance are handled by the Industrial Accidents Division. Employers who fail to provide coverage can face penalties starting at $1,000 and have their business temporarily shut down. They can also lose the protection that insurance coverage offers, leaving them open to lawsuits by employees that suffer injuries or become ill on the job.
How much does workers’ comp insurance in Utah cost?
On average, employers in Utah pay $0.78 annually per $100 in covered wages.
What does workers’ comp cover?
Suppose one of your employees is injured or becomes ill on the job. In that case, workers’ comp can cover their immediate medical expenses such as ambulance rides, emergency room visits, X-rays, surgery and prescription medications.
For example, if an employee trips and falls over a misplaced electrical cord, spraining their ankle, they’ll require medical attention. Workers’ comp could cover the costs of their emergency room visit, treatment 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 result from 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.
Rarely, the unthinkable happens: A workplace incident causes the death of one of your employees. Workers’ compensation can cover funeral costs and other death benefits for the deceased worker’s family or beneficiaries.