I am totally devastated at the number of horse farms I encounter who feel they are beyond the states laws and decide not to purchase workers compensation. Workers Compensation Acts impose strict obligations on employers, such as you, coming under their provisions. It is important that you comply with every provision within your state.

I think it’s important to understand who is a employee. Any person who receives direct working orders from you whether you declare them as an employee or not . You are responsible for their well being and can be held responsible for an injury while under your care. They do not have to be on your payroll, nor do you have to be taking taxes out of their salary nor there may not even be a monetary exchange for their services, they may just be working off board or exchanging labor for lessons. You are still responsible if they get injured.

Penalties in this area are severe for not having it prior to a claim and even more severe if you have a claim and don’t have coverages. Many states are clamping down on this statute requirement. In my home state they are sending out a broad cast letter requesting proof of coverage’s and a fine to be imposed if you don’t obtain the coverage’s in ten days and a fine for each day there after.

Workers Compensation protects you against liability imposed by law for injury to employees while under  the course of their employment. It pays for all medical bills and loss of wages during the time the employee is out of work. There are several  possible instances where this coverage could be not needed. For example, some states specifically exclude certain occupations or injuries from coverage or exempt employers with less than a specified number of employees. A second instance would be in those states that give the employee at the time of hiring the option to accept or reject the state Workers Compensation law i.e. officers of a corporation. Or, those instances where employees may be exempted from the law when injured.

Premiums vary widely from state to state but on the overall rates have been coming down over the last few years. The premium is based upon your classification ( What you do) and the gross  payroll you pay your employees . If your premium is large enough you can also get an  individual experience modification and a group dividend from some carriers. Initially you must estimate your payroll for the year. If you estimate too low or high it will be adjusted at the end of the year by a physical or voluntary audit. You only  will be charged for what you have used, subject to the minimum premium for your governing classification. Room and board may be part of the calculation as well as paid vacations.

Like Equine Liability, Workers Compensation , you don’t want to fool around without having these coverage’s you could “Loose the ranch” so to speak if your confronted with a large enough loss and may never recover from it !

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