Having proper workers’ compensation coverage is critical for any business, with many businesses finding that insufficient coverage means one injury claim can ruin their business plan. Not only is it legally mandated in almost all states, but this insurance can protect your business from unexpected costs and improve your chances at long-term viability.
In Wisconsin, about 2.9 million of around 3 million workers are covered by workers’ compensation insurance, with over 128,000 active policies linked to businesses. With 97 percent of the workforce covered by an insurance policy, Wisconsin takes its insurance laws seriously. Knowing the state’s regulations gives you the best chance to set your business up for success.
Which Businesses Need Coverage?
Wisconsin requires all employees working for a business or employer with three or more workers to be covered under workers’ compensation—the only exception is farmers. Employees with fewer than three workers are still required to cover their workers if they pay more than $500 in any yearly quarter. For farmers, coverage requirements kick in if they have six or more workers for 20 or more days per year.
Almost all Wisconsin workers are covered, and both public and private employers are required to provide coverage. The few exceptions include domestic servants, volunteers and religious workers who qualify, a person working in a capacity for an employer unrelated to the employer’s business, and employees of Native American tribal employers.
The state provides an Uninsured Employers Fund to cover valid claims for employees whose employers are illegally uninsured. It’s funded through penalties to those who lack workers’ compensation in Wisconsin, which start at $750 and can rise to $100 a day for extended lack of coverage.
Employee Coverage and Compensation
Wisconsin has required coverage of employees since 1911, and they have a no-fault system where the worker doesn’t have to prove negligence or danger to claim compensation for their injuries.
This policy speeds up the process of providing compensation and removes the employer’s incentive to contest the claim. The act also limits the damages to certain lost wages, medical costs, and disability benefits. To obtain these immediate benefits, the employee waives the right to sue for pain and suffering or other damages.
Workers’ compensation covers all injuries attained on the job, including acute trauma from accidents and injuries caused by standard job duties—for instance, a shoulder injury caused by repetitive lifting. Medical costs are covered along with rehabilitation costs and mental health costs if the cause can be directly linked to work.
Where To Get Coverage
There are three primary ways to obtain workers’ compensation in Wisconsin:
- Private Insurance Companies– There are over 300 private insurance companies offering workers’ comp in Wisconsin. While most businesses are covered under these firms, they can choose not to insure companies they deem to be too high-risk or can charge higher premiums—making them a risky choice for certain businesses.
- Wisconsin’s Assigned Risk Pool– For businesses that can’t obtain coverage through private firms, this state-run pool exists as an insurer of last resort. This pool covers businesses that might be seen as uninsurable due to poor loss history, new or very small businesses, and businesses that work in hazardous occupations where injuries are more likely, like construction work or logging.
- Self-Insurance– Businesses that wish to cover their own liability must apply with the state’s self-insurance program. The state requires any self-insuring business to have security and excess insurance to prove they can cover any liabilities, with a minimum net worth of $500,000. Filing for self-insurance comes with a non-refundable $1,100 fee plus $100 for each subsidiary.
The Department of Workforce Development oversees Wisconsin’s workers’ compensation program. This organization provides job services, employment training, unemployment benefits and insurance, and a website where all important documents for employees and employers can be found.
The Wisconsin Compensation Ratings Bureau determines classification codes for each business, helping business owners know which policies they have to follow. The website allows business owners to look up their classification and find all necessary regulations.
Find Success in the Badger State
Wisconsin takes workers’ compensation seriously, maintaining some of the most comprehensive laws in the country. Fortunately, they also have one of the country’s best support systems for employers looking to set their business up correctly. Visiting their websites and ensuring you have all the correct paperwork and coverage is the best way to ensure your business gets off to a strong start.