Workers Comp in Virginia: When Your Small Business Needs It

The short answer

In Virginia, you generally need workers compensation insurance once your business has three or more regular employees. This includes both full time and part time workers. If you have fewer than three, the law does not strictly require it, but it is often a smart safety choice.

Why do I need workers comp insurance?

Workers comp is insurance that pays for medical bills if a staff member gets hurt at work. It also pays for part of their lost wages if they cannot work while healing. This insurance helps protect you from being sued by an injured worker. It is the best way to keep your business safe and stable.

Who does the state count as an employee?

Virginia law looks at the number of people who work for you. If you have three or more regular employees, you must carry this insurance. This count includes part time help as well. You should speak with a licensed agent if you are unsure about your count.

How does the state set the price?

Insurance companies look at three main things to set your price. First, they look at your total payroll. Second, they look at your job class codes. Job class codes categorize your work. For example, office work is much lower risk than roofing work. Third, they look at your claims history. This is the record of past accidents at your business.

What is a year end audit?

Most policies start with an estimate of your payroll for the year. At the end of the year, the company performs an audit. They check your actual payroll against the estimate. You might get money back or owe more money based on this final check.

Do I need to cover my subcontractors?

Subcontractors can be risky for your business. If they do not have their own workers comp insurance, they might count toward your own employee total. You should always collect their certificates of insurance to prove they have their own coverage.

What about the business owner?

Owners and officers of a company have special rules. Depending on your business structure, you may be able to include or exclude yourself from your workers comp policy. Check with a licensed agent at Trinity Solutions Insurance Agency to see what fits your situation.

Common questions

Does the Virginia Workers' Compensation Commission set the rules? Yes, this state agency oversees all rules for workers comp in Virginia.

Are there penalties for not having coverage? Yes, the state can issue penalties if you do not carry the coverage you are required to have.

Can I choose to buy it if I have fewer than three employees? Yes, many small businesses buy it even when not required to stay protected.

What is my checklist for compliance?

Count all of your full time and part time staff.
Review your job class codes with an agent.
Request certificates of insurance from all subcontractors.
Keep your payroll records organized for your year end audit.

What to do next

If you have questions about your business, the team at Trinity Solutions Insurance Agency in Glen Allen is here to help. You can get a commercial quote to see your options. You can also learn more about our general liability options to further protect your assets.