That all depends on how many employees you have and how you define the word “Need”.  Virginia law only requires employers who have three or more employees to carry Workers Compensation insurance.  However, just because the law doesn’t require you to carry the coverage doesn’t mean that you don’t have an exposure.  If you are a small employer and one of your employees gets hurt on the job you are still responsible for their lost wages and their medical bills.  The only difference is if you don’t have Workers Compensation insurance you will have to pay those bills out of your current income which could easily bankrupt many small businesses.  Also, the ultimate responsibility could still fall to the business owners personal assets.  “S” corporations and Limited Liability Corporations will not always protect business owners from liability claims, especially when there is an injured employee involved. 

Don’t trust government agencies to make insurance decisions for your business.  Use common sense and do what is reasonable and prudent given the circumstances.  It is better to have coverage and not file claims than it is to not have coverage and need it.  That is the one thing about insurance:  You have to buy it before you suffer a loss.  So, don’t risk your business and possibly your personal assets unnecessarily.  If you have employees you should have Workers Compensation.

Many homeowners use the warm months of the year to work on home improvement projects. Some projects are just a little too big for the average homeowner so we call upon local professionals to help us out.   Most homeowners don’t realize that they need to ask their contractors for proof of insurance before allowing work to begin.  You can ask your contractor to provide you with a Certificate of Insurance which lists you as a certificate holder.  You want to see that the contractor carries General Liability insurance and Workers Compensation coverage.  If the contractor is not insured, any damage he causes to your property, property of others or any injuries which occur could be your responsibility.

Recently, a friend hired a contractor to do some minor repairs in her home.  The contractor was a friend of a friend and came highly recommended.  While performing a repair her dog became excited and ran through the house knocking the contractor down which resulted him cutting his hand.  He required 22 stitches at the local emergency room.  He did not have workers compensation insurance or health insurance so my friend paid for his treatment out of pocket.  I recommended that she contact her homeowners insurance company because if the contractor is unable to work because of the injury she may find herself being served with a law suit claiming damages for lost wages.

Fortunately, this was a relatively minor loss, but it does illustrate how easily a simple temporary business relationship can turn into an unexpected financial burden.  Often, contractors will operate without insurance in order to keep their costs down.  Many times, these same contractors will attempt work that they are not qualified to perform.  The homeowner may think they are getting a great deal on the work but the reality is they may be saving money up front only to be faced with headaches down the road.   

When hiring a contractor make sure that the person you hire has the appropriate qualifications or licenses to perform the work.  Make sure that they have insurance for liability and workers compensation.  Receiving a recommendation from a friend or neighbor should not be the determining factor when you hire someone to work on your property.  To ensure that you are hiring a reputable contractor ask to see their license and insurance information.  Don’t worry, you won’t offend a  good contractor.   The ones who do get upset probably are the ones you really don’t want to have working for you anyway.