Companies in New York and throughout the country that have employees are generally required to purchase workers’ compensation insurance. In some cases, companies must buy a policy after hiring their first employees, and businesses that lack required coverage could face significant financial penalties. Company owners could also face the prospect of spending several months or years in jail for violating workers’ compensation laws. In addition, employees may be able to sue their employers to obtain compensation for medical bills and other expenses.
It is important to note that companies that operate in multiple states must follow the workers’ compensation laws of each state that they work in. In some cases, sole proprietors who don’t have any employees are still required to purchase workers’ compensation coverage for themselves. This is generally true for those who work in construction or other industries where there is a high risk of getting hurt.
However, as a general rule, those who don’t have employees are not required to purchase this type of coverage unless they want to. The same is also typically true of those who hire immediate family members to work for their businesses. Business owners who aren’t sure if they are in compliance with workers’ compensation rules are encouraged to talk to an insurance agent as soon as they can.
Companies that don’t have sufficient workers’ compensation insurance may face fines, employee lawsuits and other consequences for not being in compliance with state law. An attorney may be able to help a company owner avoid fines or jail time by negotiating a plea deal with state authorities. Legal representatives might obtain a favorable outcome for a company owner by showing that his or her organization is not required to have insurance or that there was no intent to break the law.
