Willcox, Buyck & Williams, PA Blog

Friday, December 15, 2017

When was the Last Time You Reviewed Your Workers Compensation Policies?

The State of South Carolina requires most employers to carry workers’ compensation insurance. You should read over your policy periodically to make sure you have the coverage that fits your current number of employees and that you are not paying too much for your premiums. If the number of your employees has dropped enough, you might not have to buy workers compensation insurance. The laws may have changed since you last read your policy. Now is a good time to talk with your South Carolina labor and employment lawyer about all of your company policies.

Employers Required to Provide Workers’ Compensation Insurance

The general rule is that every employer who regularly has four or more employees, whether part-time or full-time, must carry workers’ compensation insurance. Like most rules, there are exceptions to this rule. These employers are exempt from the requirement to maintain workers’ compensation insurance:

  • Employers with a total annual payroll of less than $3,000 in the previous year, no matter how many people they employed
  • Railroads
  • Railway express companies and their employees
  • Agricultural employees
  • Textile hall corporations
  • Some real estate agents paid by commission

 Your Rights to Opt In or Opt Out

Although you have the right in South Carolina to purchase workers’ compensation insurance even if the law does not require you to, you are not allowed to opt out of coverage if you fall within a category of employers who are required to provide the coverage. Sole proprietors and partners can elect coverage under their workers’ compensation, but they must be active in the business and notify their insurance carriers. They are not automatically covered unless they take those steps.

You Might Be Paying Too Much for Your Premiums

If anything has changed over time at your company, your workers’ compensation premiums might be due for a reduction. These are situations that can affect the amount of your premiums:
  • The number of employees – if you now employ fewer people than before, your premiums should go down.
  • The total wages – if higher-paid employees have retired or left and you replaced them with lower-paid employees, your premiums should be lower.
  • The type of jobs your employees perform – if you have stopped performing some higher-risk jobs, this can affect your premiums.
  • The employer’s history of accidents and claims – with the passage of time, the increased premiums you may have paid after an accident or claims should decrease.
  • The insurance company – the state of South Carolina does not set the rate for workers’ compensation premiums. It might be worth your while to shop around to see if you can get a better rate from a different company.

Self-Insuring for Workers’ Compensation Might Be Less Expensive

South Carolina allows employers to self-insure, and hundreds of employers choose this option. You can self-insure as an individual company or as part of a group pool or fund. You must meet the financial and other state requirements, and get approval from the South Carolina Workers’ Compensation Commission. You will have to carry reinsurance and a surety bond or letter of credit. Although you will have to jump through a few hoops, you might save money by self-insuring.
If you do not have expertise in workers’ compensation issues, you could make a costly mistake. For guidance, contact Willcox, Buyck & Williams, P.A. today for a consultation.


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