Which South Carolina businesses need workers’ comp insurance?

injured on the job

In South Carolina, any business with four or more employees is required to have workers’ compensation insurance, but there are some exceptions. Want to know if your business needs to carry workers’ compensation insurance for its employees? Read on to find out.

What is workers’ compensation insurance? 

Workers’ comp insurance covers the cost of medical treatments and lost wages for employees who are injured on the job. This type of insurance also covers the cost of future care for injuries or illnesses that result from employment, and, if necessary, funeral expenses for the employee. All states in the United States require businesses to carry this type of business insurance so that their workers are protected.

Workers’ compensation insurance has existed in some form or another since antiquity. One of the earliest examples of workers’ comp insurance is a law in ancient Sumeria in 2050 BC that required employers to pay for the injuries of their workers.

In the United States, workers’ compensation laws began in 1911, when Wisconsin passed a law requiring employers to pay for injuries to workers. Over the next several years, other states followed, with Mississippi being the last state in the nation to protect its workers with such laws in 1948.

Who is covered by workers’ comp insurance? 

Workers’ comp insurance covers all types of employees, including full-time workers, part-time workers, and family members who work for the business whether they are paid or unpaid.

Types of employees that do not need workers’ comp coverage 

Businesses generally do not need to provide worker’s compensation insurance for certain types of employees, including:

Subcontractors – Subcontractors are often required to carry their own workers’ comp insurance policies, or they are included in the general contractor’s general liability policy.

Sole proprietors – Sole proprietors are not required to have workers’ compensation insurance policies, though they may elect to purchase one. As a business with only one employee, sole proprietors are exempt from South Carolina’s requirement that any business with four or more employees must carry workers’ comp insurance.

Independent contractors – Companies are not required to carry workers’ comp insurance on any independent contractors they work with. An independent contractor is defined as someone who works for another party using their own equipment, who sets their own schedule and pay scale, and who manages their own workflow. If you’re not sure whether someone who works for you is an independent contractor or an employee, give us a call. It is important to know who qualifies as an independent contractor and who qualifies as an employee when it comes to workers’ comp insurance, and we can help you make sure you’re on the right track.

Members of an LLC (limited liability company) – Owners of an LLC, also referred to as members, are not required to carry worker’s comp insurance on themselves.

Need to purchase workers’ comp insurance for yourself or your employees? 

Edwards Insurance Agency in Taylors, S.C. helps business owners all over the Southeast find workers’ compensation insurance that protects their business and employees. Give us a call today!