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Employers are required to carry workers’ compensation insurance in nearly every U.S. state. 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 Vermont entrepreneurs should consider. After all, as Vermonters say, it’s better to be ready and not go than to go and not be ready.
In this case, it’s better to have insurance and not need it than not have it when you need it. In this article, we’ll explain workers’ compensation laws in Vermont — who you need to cover, who is exempt, and possible penalties for non-compliance.
How does workers’ compensation insurance in Vermont work?
In Vermont, all employers must carry workers’ compensation insurance if they have at least one part-time, full-time, or seasonal employee. There are a few exceptions to this rule, which will be discussed later in the article.
Most employers purchase insurance coverage via the private insurance market. Employers with a high risk profile may have to purchase coverage through the assigned risk market. Employers with substantial assets and cash flow can apply to become self-insurers, though the requirements are very strict.
Who needs workers’ compensation insurance in Vermont?
In Vermont, employers must provide workers’ compensation coverage as soon as they have one full-time or part-time employee. Vermont state law specifies certain individuals who are not considered “workers” or “employees,” meaning these individuals are exempt from mandatory coverage:
- Casual workers
- Amateur sports participants or officials
- Agricultural or farm laborers working for an employer with less than $10,000 in annual aggregate payroll
- Employers’ family members who live with the employer
- Domestic workers
- Commission-based, licensed real estate brokers
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, expensive 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 Vermont?
Failing to provide workers’ compensation coverage in Vermont can lead to steep penalties. For the first seven days without insurance, employers face a $100 penalty each day. Beyond seven days, the daily penalty increases to $150. In addition to fines, employers may be given a stop-work order until the lapse in coverage is addressed. Beyond those penalties, employees have the right to sue their employer for medical costs and lost wages if they’re not covered by a workers’ compensation policy at the time a workplace injury takes place.
How much does workers’ comp insurance in Vermont cost?
On average, employers in Vermont pay $1.63 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 an employee sprains their back while reaching for an item on a tall shelf, they might require medical attention. Workers’ comp could cover the costs of their emergency room visit, rehabilitation, 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.