Law firms and lawyers often deal with workers’ compensation issues from the position of counsel representing an injured worker or their employer. But what if one of your own workers were seriously injured in a slip-and-fall accident?
For law firms with employees, workers’ compensation is not just an area of practice, it’s also legally required for doing business in most states. Without the proper workers’ compensation insurance, you and your firm could face legal consequences for noncompliance. Lack of coverage also places firm and personal assets at risk in the event of work-related injury or illness.
Here are 4 key facts to know about workers’ compensation insurance for law firms and lawyers.
What Workers’ Compensation Insurance for Law Firms Covers
Workers’ compensation insurance provides benefits coverage to your firm’s employees in the event of a work-related injury or illness. Covered injuries that law firms are most likely to encounter include:
- Slip-and-fall accidents resulting in injuries at the office
- Back injuries due to lifting or overexertion
- Repetitive stress injuries (such as carpal tunnel)
- Injuries that occur during travel for work (not including commuting)
Workers who experience a qualifying injury or illness can receive funds for medical expenses and partial lost wages, in return for agreeing not to file a claim against their employer. Death benefits may also apply for cases where a work injury or illness leads to the death of a firm employee. In cases where an injured employee does bring litigation, workers’ compensation can also cover your firm’s costs to defend against the lawsuit.
Which Firm Employees Need Coverage
Workers’ compensation insurance is required by law for most businesses with employees. Coverage for solo legal practitioners and law partners is not required. However, your firm’s other attorneys, legal secretaries, paralegals, clerks and other support staff do need coverage.
While specific requirements vary from state to state, the following general coverage requirements apply:
- Workers’ compensation coverage is required by law for any non-owner or non-partner employees in almost every state.
- Employees must be covered by workers’ compensation whether they are salaried or hourly, exempt or non-exempt, or part-time or full-time workers.
- Commission-only workers are also required to be covered under some state laws.
- Contractors and subcontractors and their employees may need coverage in some states.
- Family members who are paid by your firm count as employees and need to have coverage.
- Owners and partners are not required to have workers’ compensation coverage for themselves, but still have the option to cover themselves, if desired.
- Some states allow very small businesses to forego coverage until they surpass a threshold of 3, 4 or 5 employees, after which all employees will need coverage.
Workers’ compensation insurance is regulated at the state level, meaning each state has its own requirements for benefits, coverage areas, coverage type and more. It’s important to ensure you have adequate insurance for all employees wherever your firm operates and to the extent each state’s guidelines require.
When to Reassess Your Coverage
Your law firm’s workers’ compensation insurance needs will change over time and it’s important to know when to reassess your coverage. Make sure your coverage is up to date:
- When you hire or expand—Review your coverage when you hire support staff or bring in additional attorneys.
- When you expand into a new state—Recognize that requirements will vary, so check local rules when you expand into a new state.
- When your business category changes—Note any changes to your business category that impacts coverage requirements in your state.
- When your state requirements change—Review your policy annually to ensure your firm is compliant with any new state requirements.
Why Workers’ Compensation Coverage Matters
Workers’ compensation insurance protects your law firm and your employees. Coverage ensures that employees and their families have a remedy for workplace injuries and that your firm is not unduly burdened with costly litigation in the event of an accident.
Coverage also protects you and your firm from regulatory actions, which may include costly fines or even criminal charges for noncompliance in some states.
Make sure you and your firm take time to understand the importance of workers’ compensation coverage and follow all requirements to maintain compliance. For questions about your coverage needs, contact your insurance representative.
Copyright Swiss Re Corporate Solutions 2020. This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice.