Workers' Compensation Discussion Forums

Hello,

I have a small family business, a home office. My son is currently the only employee but I hope to hire the other son when we get busier. Do I need workman's comp insurance or would health insurance be sufficient?

It's mainly office work doing computer repairs and service. We have general business coverage with a good umbrella in place.

The business is an S-Corporation, formed in Illinois August 1st of this year. My insurance agent didn't want to say so one way or another but had me call the state of Illinois. Someone there said it is required but I'm not sure they understood the situation.

What would happen if we didn't get coverage and it turned out we should have had it?

Thanks in advance for any tips.

You'll have to check with a WC provider in your state. In my state of Colorado--regardless of family members--they have to actually own a certain percentage of the s-corporation in order to exempt themselves from WC coverage.

If you are treating like employees--no ownership of the s-corporation--I would imagine that your state requires to cover them with a WC policy.

You'll have to check with a WC provider in your state. In my state of Colorado--regardless of family members--they have to actually own a certain percentage of the s-corporation in order to exempt themselves from WC coverage.

If you are treating like employees--no ownership of the s-corporation--I would imagine that your state requires to cover them with a WC policy.
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So, if they are not covered, what are the ramifications? Or, maybe they should be stockholders? I guess I need to talk to an attorney?

it looks like the answer is yes unless you list them as corporate officers:
http://www.iwcc.il.gov/insurance.htm#fam

"Under Section 4(d), an employer that knowingly and willfully fails to obtain insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000."

"Do employees who are family members have to be insured?

Yes, unless
1. they are bona fide corporate officers (see Section 3(17)(b)); or
2. they work for an agricultural enterprise ...."

"No. Group health, occupational disability, general liability, disability or property insurance will not cover workers' compensation liability. "

Thank you SO MUCH for finding that for me. That's exactly what I was hoping to see. I'm going to vote for my son to be a Vice President of the corporation so that he can opt out of Workman's Comp. He's going to have a health insurance policy so it isn't going to be necessary anyway. Also, he isn't going to be doing anything dangerous or hazardous physically in any way at all.

I glad you got your information. In our s-corporation we insure family members including ourselves under WC because we are construction contractors. So it just made sense for all of us to be covered.

I wish I had learned about this much earlier. I had a small telecom equipment sales and service company for eight years that we sold in June. All employees were covered, including myself, and I was the business manager; and never went out in the field. We could have saved the expense. I guess that most employees should be covered if they have any risk involved with their work.

the whole idea is to protect your business and your employees from the unpredictable:
the "minor" trip over a power cord that requires one or more knee surgeries
the serious auto accident on the way to make a deposit or deliver some important business papers
the falling tree that crashes thru the roof and lands you in the hospital
workers comp is for all employees especially those without the resources to handle the expenses of medical and extensive loss of work.