Every business that has employees, even one, must take out a workers compensation policy. If you’re a small business owner like a sole proprietor, partner, or LLC member then you would generally add yourself to the policy at that time.
You don’t have to, of course. It’s an optional thing, and it’s not done automatically.
Yet you probably should.
After all, you’re just as likely to get hurt on the job as your employees are. In some cases, you may even be a “key” employee, as in your business cannot easily survive without you. While workers compensation won’t help with that (that’s what key employee insurance is for) your duties do help to demonstrate that as a small business owners you may well be taking actions, every single day, that could mean you get hurt.
Even office workers and telecommuters can get hurt on the job, after all.
When you take out the policy you have to use a payroll amount. Payroll can be a little fuzzy for small business owners, but New Jersey law has a solution. You must use a minimum payroll amount of $34,320 for the purposes of calculating both your premiums and your eventual benefits in the event that you get hurt.
Of course, you may not want to use the minimum. You may make significantly more than that.
If that’s the case, the you should know that there’s a maximum payroll of $127,400 for the purposes of calculating premiums. Good news for you if you take home over $127,400 every year!
If you are a business owner who uses independent contractors to try to get around the need for workers compensation, keep in mind that New Jersey law takes a dim view of this. You should make sure that your contractors really pass the test and are not actually employees.
If you run a small business and get hurt as a covered owner, you might find your insurance company isn’t any kinder to you than it would be to one of your employees. If you’re having trouble recovering your workers compensation settlement, reach out to us for a consultation.
We can help get your medical bills covered and push your insurance company into actually delivering the service you’re being required to pay for by law.