Worker's Compensation

Recently, one of our clients got a nasty surprise from the Commonwealth of Massachusetts. A representative from the Worker’s Compensation Board walked into our client’s one-person company and demanded to see his Worker’s Compensation policy. He did not have one. He was shut down until he paid a fine and took care of the Workers Compensation situation.

Usually, this would not be unusual. Companies are supposed to have Worker’s Compensation Insurance and the punishment for not having it is harsh. There is an important exception. The owner of a business can elect out of the insurance.

Our client was the only employee of his incorporated business and he was aware that he did not need to have Workers Comp for himself. He didn’t realize that, legally, he had to make a positive election to not have the insurance. This is where he got in trouble.

My advice is to call your insurance agent to make sure you avoid this situation, and to verify that you have done everything right.