Are small businesses in Kentucky required to carry Workers compensation insurance?

If your company has employees, you will most likely need to have a Workers Comp insurance policy. Just so, there is no confusion:
The structure of your business does not change the requirement. C-corporations, s-corporations, LLC, and sole proprietors all must cover employees with Workers Comp insurance.
In Kentucky, the number of employees does not alter the requirement to have Workers Comp insurance. Even one employee, even one part-time employee, and you have triggered the requirement to maintain a Kentucky Workers Compensation policy.
Even if your Kentucky business is true family business; Work Comp coverage is required if you have family members working in the business that are not owners (stockholders), members (shareholders), or equity partners.
However, there are exceptions.
Kentucky employers that are not required to cover: Workers that are exclusively involved in farm work and domestic servants in a home (must be less than two full time employees)

Federally protected employeesCertain Religious sectsIndividual business owners, certain partners, and LLC members.

Business owners may exclude themselves form Work Comp coverage. To do this in Kentucky the exempt owners must complete the Employee’s Notice of Rejection of Workers Compensation Act (Form 4 Waiver) and have on file with the Kentucky Labor Cabinets Department of Workers’ Claims. The Form 4 Waiver can in certain instances extends beyond the business owner. In almost all cases, the risk/reward profile extends so far beyond the prudent man rule that we advise you to seek legal counsel for additional information.
………………………were it not for a single word, we would be done! However, the word Required leaves the answer above lacking.
Required by who? The U.S. Department of Labor administers programs for many federal employees, however; the U.S. Government does not require that American businesses carry insurance covering their employees.
Workers Comp coverage is the responsibility of each state. In the Commonwealth, the coverage is mandated and monitored by the Kentucky Labor Cabinet’s Department of Workers’ Claims. The Kentucky Revised Statutes address Workers Compensation and the legislation enacted to protect Kentucky workers can be found in KRS Chapter 342. Workers Compensation in the State is an “exclusive remedy”, which means the protection offered by the employer’s insurance coverage is sufficient to cover in completely any injury or disease that occurs or attributed to the workplace. There can be no additional recourse to the employer beyond the benefits offered by the workers compensation policy.
Required could also be applied to the client/customer. On a regular basis, our agency is required to provide Certificates of Insurance (including workers comp coverage) to our customer clients and prospective clients. In the litigious society that we live in most have learned to limit their own risk exposures by shifting the blame to the responsible party.
Required when it is not required. Yes! So you have passed the test, you have legally been able to waive the requirement to have Workers Comp insurance. You are a sole proprietor, say a trim carpenter, or many other artesian contractors. You have no employees and the KRS says that you are not required to have the coverage. GIDDY-UP!
Then unexpectedly comes “Big Bob the Builder” a huge General Contractor in your town. Your worries are over, all the work you will ever need, and better yet no more selling.
WHOA!!!! Big Bob, or more likely, Big Bob’s insurance company, CYA Insurance, says that you have to have Workers Comp insurance. Again, we ask, REQUIRED BY WHO?
No, you are not required to have the coverage, says the law.
Yes, you are required to have Workers Comp if you what the Do-Re-Mi that Big Bob has to offer!
Workers Compensation may seem like one of those erroneous costs. Everyone thinks that just because you are a business owner that you have money to burn, and here is on more drain to prove it!
That is certainly one way to look at the cost of Workers Compensation insurance! The other side is that for the cost of an annual premium that litigation risk associated with an injured employ is removed. That premium looks even cheaper when you consider that the U.S. has one lawyer for every 265 people (topped only by Greece).
If your business would like additional information on Workers Compensation insurance or any other Commercial or Business insurance topic please contact a TruePoint Insurance Group agent at
TruePoint Insurance Group, LLC
6287 Taylorsville Rd.
Fisherville, KY 40023
(888) 706-5423
TruePoint Insurance Group, LLC is not licensed to practice law, nor can it provide legal counsel. This summary is not intended as a legal opinion. We cannot warrant that the opinions and representations provided in this summary are accurate. TruePoint Insurance Group, LLC has provided this summary of the Virginia Graeme Baker Act for your awareness. The summary may or may not identify your requirements as a pool or spa owner. If you own a pool or spa you are advised by TruePoint Insurance Group, LLC to refer your specific situation to legal counsel.