Most businesses with employees in Indiana must have workers’ compensation insurance to provide protection against workplace injuries and illnesses. Unlike workers’ comp laws in some states, the number of employees at a business has no bearing on the requirement.

The requirement of workers’ comp in Indiana applies to full-time employees, company executives, employees working outside the state (as long as they have an Indiana working relationship), part-time employees, minor employees, and certain students receiving federally funded on-the-job training.

Some employees are exempt from Indiana workers’ compensation insurance and also are ineligible to elect optional coverage. These include:

• Railroad employees covered under the Federal Employees Liability Act
• Employees engaged in interstate or foreign commerce who have access to federal alternatives to state-based workers’ compensation (seamen, longshoremen, etc.)
• Real estate employees (i.e., real estate agents who work as independent contractors for real estate brokers)
• Independent contractors (based on a combination of IRS and state guidelines)
• Independent contractors in the construction trades
• Athletes on scholarship
• Prison inmates
• Volunteers
• Coaches for youth sports teams

In most cases, you must include yourself in your company’s workers’ compensation coverage. However, there are two key exceptions:

• If you’re a sole proprietor
• If you’re one of the parties in a partnership

In both of these cases, you don’t have to buy workers’ compensation for yourself. But you can if you think you need it. For example, if you do physical labor and are at risk of getting injured, it might make sense to include yourself in your workers’ compensation policy.

Some people aren’t required to have workers’ compensation coverage. But business owners can elect to include them under their insurance policy. This option applies to:

• Local police officers and firefighters under some conditions
• Reserve police officers
• Volunteers working for hazardous materials response teams
• Executive officers of public or nonprofit corporations
• Owner-operators who provide their vehicles and driver services to a trucking company that transports freight
• Members and managers of limited liability corporations who actively work in the business
• Individuals entered into a township, municipality, or county roster of volunteers
• Volunteers who work at state-owned or operated psychiatric facilities
• Other employees such as casual laborers, household workers, and farm or agricultural workers

If you’re an independent contractor in the construction trades, those who hire you are not required to provide you with workers’ compensation insurance as long as you meet the IRS tests for independent contractor status. You can find these in IRS Publication 15-A, Employer’s Supplemental Tax Guide. If you meet those tests, you must then fill out a Workers’ Compensation Clearance Certificate with the Workers’ Compensation Board of Indiana and pay a $20 filing fee.

These requirements also apply to independent contractors who are sole proprietors.

Indiana business owners can compare quotes and purchase a policy from private insurance companies. (Performance Group offers this service with its independent insurance marketplace.)

Some employers receive state approval to self-insure their workers’ compensation claims. This means after a workplace incident they pay for their employees’ medical and rehabilitation expenses out of their own pockets.

Estimated employer costs for workers’ compensation in Indiana are $0.75 per $100 covered in payroll. Factors that determine the cost in a state include the number of high-risk jobs performed, insurance payouts per year, cost of living, and the cost of doing business.

The level of risk associated with different positions at your business influences your premium. When your employees perform a variety of work duties, you could have a variety of workers’ compensation class codes. Insurance companies use these codes to determine your exposure to risk and your subsequent workers’ compensation costs.

When an Indiana employee dies after sustaining a work-related injury or illness, their family can collect death benefits. Dependents are eligible for 500 weeks of lost wages at 67% of the deceased’s average weekly wage. Any medical benefits and up to $7,500 for burial expenses are also covered.

Dependents in Indiana fall into two categories:

Presumptive dependents receive death benefits divided equally among them. They include:

• Spouse (as long as they do not re-marry)
• Unmarried children under the age of 21 who are living with the employee
• Unmarried children under the age of 21 who are not living with the employee but for whom the employee has a legal support obligation
• Children over 21 who have never been married and are mentally or physically handicapped, or are keeping house for the employee and not otherwise gainfully employed

Dependents-in-fact are entitled to benefits if there are no presumptive dependents at the time of the employee’s death. They include individuals related by blood or marriage who are dependent, either totally or partially, upon the deceased employee.

Indiana has a two-year statute of limitations for workers’ compensation claims. That means an employee can file a claim up to two years after an incident occurred.

If you are ready to explore workers’ comp insurance options for your Indiana business, start a free online application today to compare quotes from top-rated carriers.