Workers Compensation — Frequently Asked Questions

Requirements vary by state. Many states require workers compensation coverage as soon as a firm hires its first employee, including part-time staff. Some states set the threshold at three, four, or five employees. Texas is the only state where private employers can fully opt out of workers compensation, though doing so exposes the firm to direct tort liability from injured employees. Check your state's specific requirements, as penalties for non-compliance can include fines, criminal charges, and personal liability for firm partners.

Partners in a law firm are generally not considered employees for workers compensation purposes and are therefore not automatically covered. However, most states allow partners to elect coverage by endorsement for an additional premium. This is particularly valuable for partners who travel frequently, as auto accidents and slip-and-fall injuries during business travel would otherwise lack coverage. Partners in professional corporations or LLCs may be treated differently depending on state law and firm structure.

Operating without required workers compensation coverage exposes the firm to severe consequences. Most states impose daily fines that accumulate rapidly, and some classify non-compliance as a criminal offense carrying potential jail time for firm leadership. Injured employees can sue the firm directly in civil court, bypassing the limited benefits of the workers compensation system and seeking full tort damages including pain and suffering. Partners may face personal liability that pierces the firm's corporate structure.

Premiums are based on three primary factors: the classification code assigned to your employees, your total payroll, and your experience modification factor. Law firm employees are classified under clerical office codes, which carry relatively low base rates compared to construction or manufacturing. Your experience modification factor, or e-mod, adjusts the premium up or down based on your firm's claims history relative to similar businesses. Firms with no claims history typically receive a 1.0 factor, while those with frequent claims pay more.

Yes. Workers compensation covers injuries that arise out of and in the course of employment, regardless of where the work is performed. A remote employee who suffers a repetitive stress injury from typing or trips over equipment in their home office during work hours is generally covered. However, proving that an injury occurred during work activities rather than personal activities can be more complex for remote workers. Firms should establish clear remote work policies documenting expected work hours and designated workspaces.