Anyone starting a business needs to understand the federal, state, local, and workers’ compensation laws for operating a commercial entity. For example, you need to know how to obtain any necessary permits, register your business, navigate taxes, and comply with all workers’ rights regulations. Also, you have to have the proper insurance to protect your business, including workers’ compensation coverage, which Louisiana legally requires.
The workers’ compensation laws in LA are relatively straightforward, but you still need to know them inside and out to ensure you offer your workers all their rightful benefits and protect yourself from liabilities.
Who Needs Workers’ Comp Insurance in Louisiana?
Per Louisiana state law, almost all businesses must have workers’ compensation coverage, regardless of their size and industry. Even if you have a single full-time, part-time, seasonal, or minor employee, you have to offer workers’ comp benefits.
However, a few exemptions and exceptions apply. In Louisiana, a sole proprietor with no employees does not need coverage, and a corporate officer who owns a certain percentage of the company can apply for an exemption. Furthermore, the following business types do not legally have to carry workers’ comp insurance:
- Employees of a residence
- Musicians and performers with performance contracts
- Licensed real estate brokers and salespeople
- Employees at an unincorporated farm
- Anyone who performs exploration, development, production, or mineral transportation services
- Employees covered by federal workers’ compensation programs like the Federal Employer’s Liability Act, the Longshoremen’s and Harbor Workers’ Compensation Act, and the Jones Act
- Airplane crew members who perform dusting and spraying operations
- Officers and members of a board of directors for non-profit organizations that do not receive compensation
Who Oversees Workers’ Comp?
The Louisiana Office of Workers’ Compensation Administration (OWCA) and the Louisiana Workforce Commission (LWC) oversee and govern workers’ compensation compliance. These offices can provide you with the information you need to properly insure your workers, such as the type of compensation and insurance required by state laws for specific employee types. In addition, they handle dispute claims made against you by current or former employees.
What is Covered by Worker’s Comp Insurance?
According to Louisiana law, “Every employer, unless statutorily exempted, is responsible for the medical care and the payment of indemnity wage benefits to any employee who is injured while in the course and scope of his or her employment.”
Furthermore, the state requires workers’ compensation insurance policies to covers “both mental and physical injuries from either accidents or occupational diseases. However, a mental injury must be the result of a physical injury or of a sudden, unexpected and extraordinary stress related to the employment and in either case must be proved by clear and convincing evidence.”
Where Can Employers Purchase a Policy?
Business owners operating in Louisiana have the following options for securing workers’ compensation coverage:
- Private, For-profit Insurers– Louisiana business owners can shop around the voluntary market and purchase a workers’ comp policy from a licensed private insurance company. You can find a list of compliant companies here.
- The Non-profit Mutual Insurance Company– The Louisiana Workers’ Compensation Corporation (LWCC) is a non-profit organization and a mutual insurance company, meaning policyholders own the company. Employers can purchase workers’ compensation at a competitive price.
- Self-insurance– Businesses can apply for self-insurance certification through the Office of Workers’ Compensation assistant secretary. Self-insured employers agree to take on expenses resulting from a workplace injury or illness.
Finding a Trustworthy Provider
When it comes time to purchase an insurance policy, you should only work with companies that offer comprehensive consultation and straightforward answers. Before requesting quotes or talking with insurance agents, speak to your lawyer to understand your employer’s responsibilities regarding workers’ compensation.
Once you narrow down your options to a few providers, be sure to research their service history. Look for testimonials from clients who had good relationships with the insurance provider, and look to see if the company has experience dealing with the injuries and illnesses most common in your industry.