Massachusetts Workers' Compensation Requirements for Businesses

If you’re new to running a business, the prospect of getting business insurance can be a daunting one. Oftentimes, this is especially true for workers’ compensation.

After all, the way workers’ compensation works is kind of different from other types of insurance. So naturally, some of the requirements are a little different too.

When it comes to obtaining, maintaining, and filing claims for workers’ compensation, there are some provisions you will need to meet. We know that because we help our commercial insurance clients navigate these requirements all the time here at Berry Insurance!

In this article, we’ll go over all the workers’ compensation requirements that you should be aware of before you get a policy for your business.

Workers compensation insurance is required for MA businesses

In Massachusetts, all businesses are required to have workers’ compensation insurance for their employees, no matter how many employees there are and how many hours they work. 

Without coverage, employees could sue you for injuries or illness sustained on the job. OR, you could be issued a Stop Work Order (SWO) by the Dept. of Industrial Accidents. This could mean daily fines until coverage is secured.

In some cases, you may even need to buy workers compensation insurance for yourself as a business owner. In MA, officers of corporations are automatically covered, while sole proprietors, members of LLCs or partnerships must opt in for coverage. Corporate officers can elect to be excluded though.

Your business must be registered

In order to obtain coverage, your business needs to be registered in a few different places.

In MA, your business must be registered with the Secretary of the Commonwealth and the Mass. Dept. of Revenue.

If you try to apply for workers’ comp before being registered, you could be denied.

You’ll need to provide some information to apply for workers comp

Like any type of insurance, when you apply for workers’ compensation, you will need to be prepared to provide some detailed information.

This will include basic contact information such as name, business name, address, phone number, etc.

You will also need to estimate total payroll for the policy period, and you may even need to submit quarterly 941s if available.

You will need an employer ID number

In addition to providing some business information, you will also need to provide a Federal Employer Identification Number (FEIN) from the IRS.

Don’t have an FEIN? Don’t worry, getting an ID is actually simple and free and can be done by applying online, by phone, through mail, or through fax.

Once you are appointed a FEIN through the IRS, you can continue the application process.

You may need to adjust coverage if you work across state lines

If your business operates in states other than Massachusetts, you’re going to need to take some additional steps to make sure you are fully covered.

If you do business out of state, you will either need to add coverage for multiple states, or get separate policies for the additional states. You’ll need to work with your agent to find out which scenario applies to you.

If you own a business outside of MA, but do some work in MA, you may be able to just add MA as a covered state to your existing policy. Again, you’ll need to check with your insurance agent.

You will need to post notice for employees

In MA, once you obtain your policy, you are required to post a Notice to Employees poster in a common area, so all employees can see the coverage you have and know how to report a claim.

Your insurance carrier will send this document to you when they issue your policy, but if you don’t receive it, be sure to reach out to your insurance agent so you can comply with this requirement.

You may be asked to show proof of coverage

If you work with other businesses, vendors, clients, etc., they may ask you at one point or another for proof of workers’ comp insurance. Generally, you would show this to them in the form of a certificate of insurance (COI).

A certificate of insurance is a document proving you have insurance coverage. They could be for any type of business insurance, but are most often needed for general liability or workers compensation insurance.

The COI outlines details about your insurance policy including company name, insurer name, type of insurance, policy numbers, policy effective dates, and coverage limits.

Essentially, the COI serves as a proof of insurance so other businesses you work with know you have the insurance protections essential to minimize risks. It serves as a peace-of-mind before entering into a business agreement.

If you are asked to provide proof of workers’ compensation, your insurance agent can provide you with one for free.

To learn more, read this article: What is a Certificate of Insurance and Why Do I Need it?

You’ll need to report injuries immediately

If you have an injured employee, you must report the claim immediately to your insurance carrier. The insurance carrier then reports the injury to the Dept. of Industrial Accidents (DIA). If you do not do this within 7 calendar days, you may be fined.

You’ll need to complete annual audits

At the end of the policy period, you will be required to complete an audit (either over the phone, electronically or in person). You will be required to report actual payroll figures during the policy period, and will receive a bill for any additional premium, or a refund/credit for any overages.

If you cancel your policy or let coverage lapse, you will not be able to obtain new coverage until your audit has been completed and any additional premium (if applicable) is paid.

To learn more about the audit process, check out this article: 5 Steps to Get Through Your Workers Comp Audit.

Navigate your workers’ comp policy with the right agent

As you can see, there is a lot that goes into Massachusetts Workers’ Compensation insurance and it isn’t always easy to navigate alone.

That’s why it’s important to work with an insurance agency who can help walk you through workers’ comp insurance including the application process, claims process, audit, and more.

At Berry Insurance, we pride ourselves in doing all those things and more, so hey -- maybe there’s a chance we’re the right fit for you.

To find out, check out this article: 8 Benefits of Having Business Insurance with Berry Insurance.