Is Your Firm In Compliance with Your States Workers’ Compensation Rules?


The mandatory requirement to carry Workers’ Compensation Insurance by Employers for their Employees various from State to State.

The following is a quick overview of the requirements for the States of Missouri, Illinois and Kansas.


In the State of Missouri, Workers Compensation Insurance is mandatory when an employer has 5 or more employees. There are exceptions to this rule such as the employer in the construction business in which you only need to have one employee to be required to meet the workers’ compensation obligation and on the other side of the spectrum, groups such as farm laborers, domestic servants, real estate agents etc. are not required to carry the protection.

The general rule for a law firm to follow: If you employ five or more employees, you are required to carry workers’ compensation insurance unless you receive approval from the Division of Workers Compensation to be self- insured. If you employ five or more employees and wish to be self-insured, you must submit an application to the Division of Workers’ Compensation along with supporting financials. The Division of Workers Compensation will consider your request to self-insure after reviewing your application along with financials supporting your capability to cover the exposure.

The definition of “employee” includes both full and part-time employees, seasonal and even temporary employees.

Sole proprietors and partners are not automatically covered under a workers compensation policy unless they elect to be covered and added by an endorsement.  Members of a limited liability company are presumed to be covered unless they opt out in writing.

Corporate officers are considered employees of the corporation and must be covered unless there are no more than two owners of the corporation who are also the only employees of the corporation. Again the corporate officers would need to opt out of coverage in writing.

Exempt employers that decide not to buy Workers compensation insurance or to self-insure may be exposure to civil lawsuits brought by employees who are injured during work.

Per the Missouri Department of Insurance website, “failure to provide required coverage is a Class A misdemeanor with a penalty equal to three times the annual premium you should have paid, up to $50,000. You also are liable for the costs of any injuries suffered by your employees. A second violation results in a class D Felony.”


In the State of Illinois, an employer is required to provide workers’ compensation insurance for almost everyone who is hired, injured or whose employment is localized in Illinois.  If you have one employee, even a part time employee, you must obtain worker compensation insurance.   Again, there are exceptions as provided in Section 3 of the Act.

Sole proprietors, business partners, corporation officers and members of limited liability companies may exempt themselves by notifying the carrier in writing of your intentions. If you are in the construction business, trucking or hazardous occupations, you may not be able to opt out of coverage.

In Illinois, can an employer be self-insured? The answer is yes if the employer applies to the Commission for authorization to insure its own workers’ compensation liabilities and can meet certain requirements including proving that you have sufficient financial strength to be responsible for the payments and administration of the employers’ workers compensation claims. The employer must file their application request each year and provide interim financial statements.

In Illinois, an employer that knowingly and willfully fails to obtain insurance may be fined up to $500 for every day of non- compliance with a minimum fine of $10,000. Corporate officers can be held personally liable if the company fails to pay the penalty.

Corporate officers who are found to have negligently failed to obtain insurance are guilty of a Class A misdemeanor and a Class 4 felony if they have knowingly failed to obtain insurance.

If an employer fails to obtain insurance and an employee is injured during the course of their employment, the employee may sue the employer in civil court. The burden of proof is on the employer as to prove they were not negligent


In the State of Kansas, payroll basically determines if one is required to carry workers compensation insurance for their employee. If you are an employer in Kansas and your gross annual payroll is more than $20,000 you are required to carry workers compensation coverage. There are exceptions of course as with any state such as certain agricultural workers, corporate employees owning 10 percent or more of stock, firefighters belonging to a relief association program, individuals, sole proprietors and partners etc.

Questions on who is an exception to the workers compensation law in your state can be obtained by calling the States’ Department of Labor Division of Workers Compensation.

Can an employer self insure in the State of Kansas? The answer is yes by submitting an application to the Kansas Department of Labor and by meeting the requirements financially to meet the criteria to be self insured.

Intentional failure to provide workers compensation protection is a Class A misdemeanor and the employer is subject to a civil penalty in an amount twice the annual premium the employer would have paid for insurance or $25,000 whichever amount is greater.

Kaestner & Berry is willing to assist you with any of your workers compensation needs.