Workers Compensation Insurance is an insurance coverage that most employers are required to carry, by Michigan law. The law states that all “private employers regularly employing 1 or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks” are required to carry workers compensation. Also all “private employers regularly employing 3 or more employees, including part-time employees” are required to carry workers compensation. Other employers are also required to carry this type of insurance, but for Wendy’s Briefcase we will concentrate on the employers described above.
Based on the law, purchasing a workers compensation policy is not an option if your business falls into one of the 2 above categories. Our agency gets many calls from people who suddenly want to purchase the coverage because they need a certificate of insurance for a job they have completed or are getting ready to start. This is not the right time to start looking for coverage, the right time to purchase it is when you meet the above criteria and then you must keep your workers compensation policy inforce to avoid the fines and penalties for not have the coverage. An “employer may be subject to a fine of $1,000 per day or imprisonment for no less than 30 days nor more than 6 months, or both. Each day for which an employer is uninsured is considered a separate offense.” So if an employer did not have workers compensation insurance for 30 days, their fine would be $30,000.
Knowing the law and following it saves employers quite a bit of money, both because they will incur fines and because they can negotiate a better price from insurance companies when workers compensation coverage is continuously maintained.