Utah Workers' Compensation Requirements
All employers in the state of Utah are required to carry workers’ compensation insurance. However, individuals who hire out their services and have no employees are permitted to waive their rights to workers’ comp coverage. These individuals are required to obtain a Workers’ Compensation Coverage Waiver (WCCW) which must be renewed annually. Utah has its own online waiver system.
Sole Proprietors, Partners and LLC Members are excluded from coverage, but may elect to be included for coverage.
Sole Proprietors or partnerships who have no employees other than the sole proprietor or partner are not required to purchase Workers’ Comp. If these businesses are contracting work through a general contractor they or the general contractor will be required to provide a workers’ compensation insurance certificate.
Corporate Officers are included for coverage, but may elect to be excluded if certain conditions are met. Corporations with no employees, except directors and officers, are allowed to exclude themselves from coverage. However, there is a limit of 5 officers and directors that may be excluded.)
Directors or officers of a corporation are considered employees and must exclude themselves from coverage through an insurance company.
All General Contractors are required to ensure that all his subcontractors; including sole proprietorships, partners and corporate officers, have work comp coverage. If they do not have workers’ compensation coverage then the subcontractor becomes an employee of the general contractor. In this case the general contractor must carry work comp coverage.
Utah Workers' Compensation Forms
Utah First Report of Injury Form
First Report of Injury Form. Employers should complete this form and send to their insurance company each time an injury occurs.
Utah Application for Exclusion of Officers and Stockholders
Owners and Officers of corporations should complete this form to exclude themselves from a work comp policy.
Workers' Comp Exemptions in Utah
Sole-Proprietors and Partners who include themselves on workers’ compensation coverage must use a payroll amount of $47,600 for rating purposes
Corporate Officers and LLC Members who are not included for coverage must utilize a minimum annual payroll of $46,800 and a maximum payroll of $192,400 in order to calculate the cost of workers’ comp insurance.
Workers' Comp Verification
How is Workers' Comp Calculated?
Workers’ compensation is a commercial insurance product categorized as Property & Casualty insurance (P&C Insurance). Even though workers’ comp is calculated using estimated payroll wages and class codes, premium is still a separate business expense from the cost of payroll. Utah Employers may treat the cost of coverage as an expense on their taxes.
Work comp rates for all job classification codes are always expressed as a percentage of $100 in wages. An annual policy is always subject to an audit because it was based on estimated wages and not actual wages.
Here is an example using two class codes with different estimated payroll for each class code:
In order to calculate the cost of the policy you only need to multiply each rate with its divided payroll. It benefits employers to re-calculate their premium as their payroll becomes larger than originally anticipated.
Utah Workers' Compensation Insurance
Every state has their own laws to determine how employees must be covered and how they must be classified for rating premium. A lot of states use state specific class codes and have different requirements for who is obligated to carry workers’ compensation insurance.
If you have employees that travel out of state for work, or they work in multiple states throughout the year, you may need to buy a policy for each of the states where your employees are located and working. In most cases, you can cover multiple states on one policy.
Workers’ Compensation Insurance in Utah can be purchased from private insurance companies authorized by the state to provide coverage. The Assigned Risk Pool, or an alternate State Insurance Fund, is available for businesses that are unable to find coverage from a private company. Our specialists help will help you navigate your best options.
Policy premium is based on numerous factors including: class codes assigned to your business and employees, estimated payroll, covered states, prior policies, owner experience and previous workers compensation claims.
What Does Utah Workers' Comp Cover?
Utah workers’ compensation insurance helps pay claim expenses when an employee, or a covered sub-contractor, is injured while working for your business. It also shields your business from other legal liabilities associated with an injured employee. Work comp coverage includes:
Workers’ comp insurance pays for the medical expenses associated with claims or injured workers. The cost of an ER visit, required surgeries and drug prescriptions are some of the covered expenses included under a policy. An employee injured due to a slip and fall would be covered, for example. Coverage for medical benefits can also include longer term expenses such as physical therapy or rehabilitation.
Most business owners can’t afford to continue paying employees if they are unable to work while they are injured. Workers’ comp income benefits in Utah will replace most of your employees missing income if they are away from work due to an injury or illness. For example, if a construction employee broke his arm and could not perform the job for 8 weeks, the coverage would make payments to the employee to help replace the lost wages.
Sometimes an injury can cause a partial disability or a more permanent disability. Workers’ compensation steps in to help pay the cost of ongoing medical bills and may even replace a portion of wages lost due to the disability. If an employee had a finger amputated due to a work related injury. The employee could be paid a sum (known as an Impairment Rating) for the loss of the finger for permanent disability as well as some temporary disability coverage while recuperating.
Some types of work environments can include occupational exposures that have unforeseen circumstances. A chemical mixing operation, for example, may expose employees to chemical irritants and cause harmful reactions that make them sick. A workers’ comp policy would cover the cost of treating an illness caused while performing the job.
Nearly 50,000 deaths happen at work each year. Many of these are in the construction and trucking industries. A workers’ compensation policy is designed to cover the cost of these funerals and to provide death benefits to the employees family. State guidelines often determine the dollar amount of coverage.
Workers’ compensation coverage is a No-Fault system designed to prevent costly employee lawsuits related to on-the-job-injuries. Many state provisions include Exclusive Remedy rules that protect covered businesses from these lawsuits in exchange for providing workers’ comp coverage for their employees. Claims should be reported to a supervisor with 30 days. Employers should also report any claims or accidents to their insurance company within 30 days from notification.
How Does Workers' Comp Work?
Workers' comp coverage protects employees when injured. It makes good financial sense for both parties.
- Loss of income for employees unable to perform job duties
- Medical expenses for employees injured on the job
- Retraining expenses for employees unable to return
- Permanent injury or disability for lasting injuries
- Survivor benefits if employees are killed on the job
Coverage does not protect employers from everything. Sometimes employees and employers can be negligent.
- Injuries resulting from a violation of the law
- Incidents resulting from employees' use fo drugs or alcohol
- Injuries that did not occur in connection with the job
- Clear company policy violations
- Injuries that did not occur in connection with the job