Workers comp insurance

Do You Need Workers’ Comp Coverage for Family Members?

One question we often get from small business owners is whether they have to secure workers’ comp coverage for family members who work for them. The short answer is “yes” in most cases.

Under most state laws, every employer that uses employee labor, including family members, must secure workers’ comp coverage. When we talk about family members, we usually mean children, spouses, nieces, nephews, uncles, aunts, grandparents, and cousins.

If you fail to include a working family member on your workers’ comp policy, you could risk a fine, so it’s wise to understand the regulations.

Here are a few scenarios:

Your nephew helps in your business for a few hours a day, but you don’t consider him an employee – Under most state labor laws, he is considered an employee. An “employee” is defined as someone you engage or permit to work. Even though your nephew is part of your family, he is considered an employee and must be covered by workers’ comp insurance in case he is injured on the job.

If the state finds out you don’t have the necessary workers’ comp insurance, you could face severe consequences, including fines and even misdemeanor charges.

Also, if your nephew got hurt at the store, he (or his parents) could file a personal injury lawsuit against you if you don’t have him covered by your policy.

You run a diner, and your daughter works 25 hours a week in the kitchen. Your daughter would be considered an employee subject to workers’ compensation laws, and she would not be able to be excluded from your workers’ compensation (unless, of course, she was an owner/officer, member, or partner).

You have a small business, and your husband helps out about 10 to 15 hours per week – Your workers’ comp policy may not have to cover you and your husband.

However, it could depend on whether your business is a sole proprietorship (which can be owned by a married couple in many states), a partnership, or a limited liability company.

If you are a married sole proprietor, typically, your insurance company will consider your spouse a co-owner and exclude them without any question. However, different insurance companies handle this situation differently, so it’s important to know how yours handles it.

If you’re a corporation, LLC, or partnership, your spouse cannot often be excluded merely because they are your spouse. If you formed a corporation, your spouse would have to own shares and be a titled officer in the corporation to be excluded. 

If you formed an LLC, your spouse would have to be a member of the LLC to be excluded. If you formed a partnership, your spouse would have to be one of the partners to be excluded.

BGES Group, located in Larchmont, N.Y., are New York Construction Insurance Specialists representing 50+ companies and all the BEST general & umbrella liability programs! We offer every coverage you need, including property, builders risk, inland marine, general liability, umbrella liability, auto, bid & performance bonds, workers’ compensation, N.Y.S. disability, and group health.  We are highly responsive, responsible, trustworthy, and fast, and we minimize your insurance headaches. We don’t charge ridiculous policy or service fees, and when you call, text, or email, whatever time of day, even on weekends, we are there to help YOU!  

BGES Group are Workers’ Compensation Insurance Specialists for Tri-State Business Owners: Unhappy with your rates, company, being canceled, losses causing difficulty getting coverage, in the middle of an audit dispute, misclassified payrolls, or whatever your issue. We can help!  We have special programs for Auto Services, Contractors (especially in New York), Limousine Services, logistics companies, Manufacturers, Recyclers, and Truckers; we can help ANY tri-state business owner.  We are considered “Preferred Agents” for this one program that, if we can get you into, their pricing is excellent, offers long-term coverage stability, and can cover multi-state operations. The program takes the hassle out of doing annual audits, too. 

If you want to speak with us, call Gary Wallach at 914-806-5853, click here to email, or visit our website.

Company: BGES Group, 216A Larchmont Acres West, Larchmont, NY 10538



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