Kentucky Insurance Questions Answered

The state of Kentucky mandates that all businesses with at least one employee must carry workers’ compensation insurance. There are a few exceptions. It is not necessary to purchase coverage for sole proprietors, LLC members, or partners, though you may if you want to. 

Employers in Kentucky are also not required to cover:

• Domestic workers in a private residence unless there are more than two full-time workers in the home
• Employees already covered by federal liability legislation (such as railroad workers)
• Workers who provide services in exchange for aid or sustenance from a religious or charitable organization

If you are unsure about whether you need to purchase coverage, you can consult with a local independent insurance agent.

Every business is different, and, just like with business insurance, workers’ compensation rates will vary according to the company’s size, industry, and scope. Your cost for coverage will be based mainly on the types of work your employees do and your company’s overall payroll amount. 

Every kind of job is assigned a classification code. Coverage rates for each class code are set by the Kentucky Department of Workers’ Claims in accordance with the job’s associated risks. 

Commercial insurance providers are required to use these standardized rates as a starting point, but they are permitted to offer discounts and incentives of up to 25% based on your company’s safety rating, claims history, and experience modification. That is why comparing quotes is beneficial.

The following are average rates paid per every $100,000 in employee payroll for some common jobs in the state of Kentucky:

• Roofing contractors: $11,520 per year
• Tree trimmers/removers: $5,680 per year
• Plumbing contractors: $1,740 per year
• Fast food workers: $630 per year
• Clerical workers: $90 per year

As you can see, it costs far more to insure workers who have a high risk of injury (such as roofers) than workers who very rarely suffer serious injuries in the workplace (such as office workers). 

For help obtaining actual, customized quotes for your particular business, contact a local independent insurance agent.

Workers’ compensation insurance (sometimes referred to as “workman’s comp”) covers the costs associated with on-the-job injuries and occupational illnesses. You can expect your policy to pay for the following:

• Medical treatment: Workers’ compensation insurance is designed to cover all costs associated with medical treatment and follow-up care for work-related illnesses and injuries. This includes coverage for doctor visits, hospital stays, follow-up care like physical therapy, and any necessary prescription medications.
• Mileage reimbursement: In Kentucky, injured workers may obtain reimbursement for miles driven or other travel costs for going to and from doctor visits and pharmacies. This includes any reasonable costs associated with taxi, bus, or train fares and tolls as needed.
• Short-term disability: Employees who need to take off more than seven consecutive days to recuperate from a work-related injury are eligible for short-term disability. Workers’ compensation will pay them a weekly benefit of 2/3 of their average weekly pay until they are able return to work. As of 2017, the state of Kentucky required workers’ comp to pay a minimum of $167 per week and allowed a maximum amount of $835.04 per week.
• Permanent disability: Serious injuries may leave workers unable to ever return to their jobs. In this case, workers’ compensation insurance can provide weekly compensation in an amount that is dependent on the injured employee’s previous earnings and their impairment rating. Injured workers may collect permanent disability payments for up to 425 weeks if their disability rating is 50% or lower, and for up to 520 weeks if their impairment rating is greater than 50%.
• Survivor benefits: In the unfortunate event that a work-related injury or illness results in death, workers’ compensation will pay a lump sum of at least $70,000 to the employee’s estate, some of which can be applied toward burial costs. Additionally, the employee’s spouse and dependent children will be entitled to receive weekly benefits in an amount that is based on the deceased worker’s previous earnings as well as the number of dependents left behind.

You can learn more about each of these benefits by talking to a local independent insurance agent.

Occasionally, a workers' compensation claim may be denied. There are a number of reasons this may occur:

• If the insurer has reason to believe that the injury in question did not actually occur while on the job
• If the injury occurred at a non-mandatory recreational event sponsored by the employer
• If there is reason to suspect that the injury was intentionally self-inflicted
• If the injured employee was under the influence of drugs or alcohol at the time of the incident
• If the injured employee had refused to use provided safety equipment
• If the injured worker is not an official employee of the insured

If you believe that your workers’ compensation claim was unjustly denied, the decision may be appealed. You can do this by filing a petition with the Kentucky Department of Workers’ Claims. Your case will be heard by an administrative law judge, who will issue a ruling at the hearing. If you are unhappy with this ruling, you can appeal it by submitting a petition for review to the state.