Workers' Comp Insurance: Employer Obligations

Learn about your legal options if you’ve been injured at work and your employer doesn’t carry workers’ comp insurance.

When employees are injured at work, they usually have to go through their state's workers' compensation system to get reimbursed for their medical treatment and receive other benefits, like partial wage replacement when they're away from work because of their injuries.

Do Employers Have to Have Workers' Comp Insurance?

In almost every U.S. state, the vast majority of employers must carry workers' compensation insurance, either through a third party insurance carrier or through a self-insured program set up by the employer. In most states, employers must get workers' comp insurance when they hire just one employee. In other states, employers only need to get insurance when they hire a few employees, usually between two and five.

But what can you do if your employer doesn't have this insurance? Most states will allow employees in your situation to sue their employers in court, through a personal injury claim.

Benefits of Personal Injury Lawsuits

There are some advantages to filing a personal injury lawsuit as opposed to a workers' comp claim. For one thing, you can seek the full amount of your losses (or "damages," in legalese) without being subject to an arbitrary cap set by law. (Most states only pay around two-thirds of the worker's wage loss for temporary disability benefits, only up to an established maximum amount, and for only a limited period of time.)

Another benefit of a personal injury lawsuit is that you can collect money damages for the emotional distress caused by your injuries (called "pain and suffering" in legal jargon). You may also be able to collect "punitive damages," which are intended to punish the employer if its particularly bad misconduct caused your injuries. Neither of these types of awards is available through workers' comp.

Potential Downsides of Personal Injury Lawsuits

However, there are also drawbacks to suing in court. It can be a much slower process. While you might receive benefits through workers' comp in a matter of weeks, it can be months or even years before you see any money through a lawsuit.

Also, unlike workers' compensation—which is a no-fault system—you'll need to prove that your employer was at fault for the personal injury accident. You should talk to a lawyer right away so that you can start the process and make sure your suit is filed in the proper legal timeframe.

Other Recovery Options for Injured Employees

There are a couple of other ways that you can seek compensation for your lost wages and medical treatment. Many states have special funds reserved for people who are injured while working for an uninsured employer (often called "Uninsured Employers' Funds"). You may be able to get your medical bills covered by this fund or receive payments for a portion of your wage loss from the fund. Check with your state's workers' compensation office for more information on how to file a claim.

A few states also have temporary disability insurance programs, which may provide you with short-term benefits while you're unable to work.

Hire an Attorney

If you've been injured on the job and your employer doesn't carry workers' comp insurance, your first call should be to an experienced workers' comp or personal injury lawyer. A lawyer can help you get the financial settlement you deserve whether inside or outside the workers' comp system. Most attorneys offer a free consultation and charge no fee unless you win your case.

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