Worker injuries aren’t a typical risk associated with a design firm’s office space the way they are for a builder’s job site, but accidents at the office can and do occur. Workers’ compensation insurance for architects and engineers is an important coverage that protects your business and your workforce from these incidents and ensures compliance with state and local laws.
No matter what environment architects, engineers and other design professionals work in, they need to be protected by workers’ compensation coverage. It’s legally required in most states, meaning you and your design firm could face legal consequences for noncompliance. Lack of coverage also places business and personal assets at risk in the event of a work-related injury or illness.
Here are 4 key points to know about workers’ compensation insurance for architects and engineers.
1. What Workers’ Compensation Insurance for Architects and Engineers Covers
Workers’ compensation insurance provides coverage to your design firm’s employees in the event of a work-related injury or illness. Covered injuries that architects and engineers are most likely to encounter include:
- Slip-and-fall accidents resulting in injuries at the office
- Back injuries due to lifting or overexertion
- Repetitive stress injuries (such as carpal tunnel)
- Injuries that occur during travel for work (not including commuting)
- Injuries that occur onsite at construction sites, factories or labs
Workers who experience a qualifying injury or illness can receive funds for medical expenses and partial lost wages, in return for agreeing not to file a claim against their employer. Death benefits may also apply for cases where a work injury or illness leads to the death of an employee. In cases where an injured employee does bring litigation, workers’ compensation can also cover your design firm’s costs to defend against the lawsuit.
2. Which Design Firm Employees Need Coverage
Workers’ compensation insurance is required by law for most businesses with employees. Coverage is not required for sole proprietors and partnerships. However, your office’s other design professionals, assistants and support staff do need coverage.
While specific requirements vary from state to state, the following general coverage requirements apply:
- Workers’ compensation coverage is required by law for any non-owner or non-partner employees in almost every state.
- Employees must be covered by workers’ compensation whether they are salaried or hourly, exempt or non-exempt, or part-time or full-time workers.
- Commission-only workers are also required to be covered under some state laws.
- Contractors and subcontractors and their employees may need coverage in some states.
- Family members who are paid by your design firm count as employees and need to have coverage.
- Owners and partners are not required to have workers’ compensation coverage for themselves, but still have the option to cover themselves, if desired.
- Some states allow very small businesses to forego coverage until they surpass a threshold of 3, 4 or 5 employees, after which all employees will need coverage.
Workers’ compensation insurance is regulated at the state level, meaning each state has its own requirements for benefits, coverage areas, coverage type and more. It’s important to ensure you have adequate insurance for all employees wherever your design firm operates and to the extent each state’s guidelines require.
3. When to Reassess Your Coverage
Your design firm’s workers’ compensation insurance needs will change over time and it’s important to know when to reassess your coverage. Make sure your coverage is up to date:
- When you hire or expand—Review your coverage when you hire support staff or bring in additional design professionals.
- When you expand into a new state—Recognize that requirements will vary, so check local rules when you expand into a new state.
- When your business category changes—Note any changes to your business category that impacts coverage requirements in your state.
- When your state requirements change—Review your policy annually to ensure your design firm is compliant with any new state requirements.
4. Why Workers’ Compensation Coverage Matters
Workers’ compensation insurance protects your design firm and your employees. Coverage ensures that employees and their families have a remedy for workplace injuries and that your design firm is not unduly burdened with costly litigation in the event of an accident.
Coverage also protects you and your design firm from regulatory actions, which may include costly fines or even criminal charges for noncompliance in some states.
Make sure you and your design firm take time to understand the importance of workers’ compensation insurance for architects and engineers and follow all requirements to maintain compliance. For questions about your coverage needs, contact your insurance representative.