Workers' Compensation Insurance

Missouri Employers are required to carry workers’ compensation insurance if they have five or more employees.  Missouri Employers involved in the construction industry are required to carry the coverage if they have one or more employees.  This applies to all employers, regardless of whether the employees are part-time/casual laborers, full-time, or family members.

Members of an LLC and officers of a corporation apply towards this employee count, sole proprietors and members of a partnership do not.

Sole proprietors and members of a partnership are not themselves covered unless they elect, with their insurer, to be covered. Employees of sole proprietors and partners, including family-member employees are also covered, unless they opt out of coverage. Members of a limited liability company are presumed to be covered unless they opt out with their insurer.

_{Note:  “Construction” is defined as: Employers who erect, demolish, alter or repair improvements}

Exceptions

Employers that don’t have the required number of employees or who have employees in the exempt categories may “elect” to come under the law and carry workers’ compensation insurance. Exempt employers that decide not to purchase workers' compensation insurance or to self-insure remain exposed to civil lawsuits brought by employees who are injured during work.  Therefore, employers exempt from coverage remain at risk and may wish to obtain workers’ compensation insurance, even if not required.

Railroad, postal, and maritime workers are covered under federal laws and not by Missouri Workers’ Compensation Laws. Other exceptions include: farm labor, domestic servants in a private home, occasional labor performed for or related to a private household, qualified real estate agents, direct sellers, volunteers of a tax exempt organization which operates under the standards of section 501(c)(3) or 501(c)(19) of the federal Internal Revenue Code where such volunteers are not paid wages and adjudicators, sports officials or contest workers for interscholastic activity programs or amateur youth programs who are not employed by the sponsor of the event.

Those subject to providing workers’ compensation insurance for their employees must either go through an insurance carrier or may choose to be self-insured upon approval from the Division.

Insurance Carriers

Many employers purchase insurance from an insurance carrier just like they would buy auto insurance and other liability insurance. When buying insurance in the insurance market, most employers buy a policy from an insurance agent who writes the policy through an insurance company the agent represents. The remaining employers who are not self-insured may potentially be insured through the residual market, commonly known as the assigned risk pool or “pool.” Employers in the pool usually consist of those employers who have trouble finding coverage in the voluntary market and those with small premiums (under $10,000). The Missouri Department of Commerce and Insurance provides an on-line service where an employer can inquire about workers’ compensation rates by insurance companies and rate comparisons for all workers’ compensation insurers in the state. An employer will need to know all applicable classification codes to inquire about manual rates.

Self-Insurance

As an alternative to purchasing an insurance policy, employers and groups of employers may apply to the Division of Workers’ Compensation to self-insure their workers’ compensation obligations. Application can be made through the Division’s Insurance Unit. The Insurance Unit functions as the chief underwriter, regulator and auditor for the self-insurance program. There are two types of self-insurance individual and group trusts. An employer wishing to self-insure must have the financial capability to self-insure. The inability of an employer to meet financial obligations of work-related injuries will directly impact the entire financial stability of the company. A potential advantage of self-insuring is reduced costs.

Related: Individual Self-Insurance
Related: Group Trust Self-Insurance