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Small Business Work Comp Requirements in Kentucky

Most Kentucky small businesses are required to carry workers’ compensation insurance.

Employers are responsible for maintaining a safe workplace and training employees on safety procedures. But when accidents happen, workers’ compensation helps navigate these situations.

A workers’ compensation policy covers employees that are injured on the job, while protecting the employer by limiting their liability. Most employers must carry it for their employees, whether full-time or part-time.

Any employees working in Kentucky must be covered by a workers’ compensation policy. State law has no exceptions for family members, temporary or part-time employees.

Factors That Impact Coverage

Sole proprietors: Excluded from coverage but have the option to include themselves.
Independent contractors: Excluded from coverage. Employee or independent contractor? 10 ways to tell >>
Corporate officers: Included in coverage but may exempt themselves from coverage by filing an Employee's Written Notice of Rejection.
Partners or members of an LLC: Exempt from coverage under certain circumstances.
Out-of-state employers: If employees are performing any work in the state, employers are required to provide Kentucky coverage.

Coverage and Rates in Kentucky

A small business workers’ comp premium can range from a few hundred dollars to a few thousand dollars, depending on four main factors:

Class code, or industry.
Location.
Payroll.
Experience (years in business and past history of claims).

Kentucky recently passed reforms to overhaul its workers’ compensation system, the most significant changes in decades. Aimed at cutting costs, reforms include a limit on the number of years partially disabled workers can receive benefits, and preventing workers’ compensation cases from being reopened several years after a claim. Similar to many other state work comp systems across the country, the new legislation also takes steps to address the opioid crisis.

Workers' compensation insurance covers wage replacement and medical bills for employees injured on the job. To protect against other injuries at your place of business, you may need general liability insurance. Learn more about general liability >>

Kentucky Work Comp Resources

Workers’ compensation regulation: Kentucky Department of Insurance and the Kentucky Department of Workers' Claims
Kentucky rating bureau: NCCI (National Council on Compensation Insurance)
Kentucky state fund and market of last resort: Kentucky Employers’ Mutual Insurance (KEMI)

Kentucky has a private market, which means that employers can purchase workers' compensation insurance from any insurance carrier or agency that is licensed to write in that state. WorkCompOne can write workers' compensation policies in any U.S. state except those that practice state-run workers' compensation (Ohio, Washington, North Dakota and Wyoming).

Kentucky also has a competitive state fund. Kentucky Employers’ Mutual Insurance (KEMI) is independently run, and provides a market of last resort for employers that can’t find coverage elsewhere.