Can Members of an LLC Be Excluded from Workers’ Comp in Georgia?
You may be able to exclude yourself from Workers’ Compensation as an LLC member in Georgia. While there are perks to doing this, there are also some notable risks associated with insurance exemptions.
Georgia allows up to five LLC members from the same company to exclude themselves from Workers’ Compensation insurance at any given time. Doing so will not eliminate your obligation to get Workers’ Compensation in Georgia. However, it might lower your monthly premiums as fewer employees would be covered. If LLC members choose to exclude themselves and are hurt at work, they won’t be able to receive Workers’ Compensation benefits. If LLC members wish to remain covered and lower the cost of insurance, they can find affordable plans that achieve that goal.
To get a quote within 24 hours, call our small businesses workers’ compensation insurance brokers in Georgia at NPN Brokers today at (866) 340-9120.
How Many Members of an LLC Can Be Excluded from Workers’ Comp in Georgia?
Some states allow certain people within a company to exclude themselves from Workers’ Compensation coverage up to an amount. Georgia also allows this to some extent for LLC members and others.
Up to five LLC members from any one company can exclude themselves from Workers’ Compensation coverage. This can be done by completing Form WC-10 and filing it with your Workers’ Compensation carrier or the Georgia State Board of Workers’ Compensation. The ability to exempt oneself from coverage extends to farm labor employees, partners, and sole proprietors in Georgia. The procedures to file for an exclusion are the same for all eligible people.
The form requires LLC members to provide their name, company, and position. You can use Form WC-10 to exclude yourself from coverage or to revoke a previous exemption. If you wish to exclude yourself from coverage as an LLC member in Georgia, it is best to inform your carrier when you agree to a policy so that premiums can properly reflect your covered workforce from the get-go.
Can Excluding LLC Members from Workers’ Comp Eliminate Your Georgia Insurance Requirements?
Though excluding themselves from Workers’ Compensation coverage can provide other advantages for LLC members in Georgia, it cannot eliminate their need for insurance altogether.
Businesses with three or more full-time, part-time, or seasonal workers in Georgia need Workers’ Compensation insurance for their employees. Georgia is clear in that excluding yourself from coverage as an LLC member won’t reduce payroll for the purposes of changing your company’s Workers’ Compensation insurance requirements.
Other states do not make this distinction, somewhat further incentivizing LLC members to exclude themselves from coverage. But Georgia does, meaning that excluding an LLC member from coverage, even if doing so would change a company’s number of covered employees from three to two, will not impact a company’s responsibility to get Workers’ Compensation insurance in the state.
Can Excluding LLC Members from Workers’ Comp Lower Your Premiums in Georgia?
Workers’ Compensation insurance premiums are largely based on company payroll numbers in Georgia. By excluding themselves from coverage, LLC members can reduce the number of covered workers and possibly lower their company’s premiums.
Employing a larger number of workers typically indicates a higher risk of workplace accidents. When LLC members exclude themselves from coverage in Georgia, they lower payroll numbers for the purposes of determining premiums. If five LLC members within a company exclude themselves, that might considerably impact its premiums.
It is important to note that payroll is not the only factor that can influence the rate of premiums. Georgia, like many states, uses the National Council on Compensation Insurance (NCCI) to help set initial premium rates for certain lines of work. In addition to payroll, NCCI ratings and a company’s history of workplace accidents may help determine its Workers’ Compensation premiums. So, while excluding LLC members from Workers’ Compensation can impact premiums, the impact might not be much, especially if the company has other notable risk factors, like previous claims.
What Happens if LLC Members Exclude Themselves from Workers’ Comp in Georgia?
If LLC members exclude themselves from Workers’ Compensation in Georgia, they will not be covered under their company’s insurance policy. This means they cannot file a Workers’ Compensation claim if they are injured on the job.
Excluding yourself from Workers’ Compensation poses risks in Georgia. If you are hurt on the job, you won’t be able to file a Workers’ Compensation claim for benefits. You might also be unable to sue your employer for compensation, as you electively chose not to receive benefits.
This might mean you are personally liable for your injuries sustained in a workplace accident. For some LLC members, the risk of sustaining work-related injuries is low. The chances of work-related injuries are greater for others that are more involved in daily tasks, especially if they operate in higher-risk industries, like construction.
Should LLC Members Exclude Themselves from Workers’ Comp in Georgia?
Whether or not to exclude themselves from coverage is up to LLC members in Georgia. However, it is worth noting that there are alternatives to taking this route, especially if the main purpose of excluding LLC members is to lower a company’s Workers’ Compensation premiums.
Our workers’ compensation insurance brokers for construction subcontractors in Georgia can help your company find affordable coverage so that excluding LLC members from its policy is unnecessary. Because of our strong relationships with reliable insurers that provide pay-as-you-go policies and others that don’t require audits, deposits, or contracts, you can stay protected and eliminate the need to exclude yourself from Workers’ Compensation.
Pay-as-you-go insurance may be preferable for certain companies, especially those with a constantly fluctuating workforce. This type of Workers’ Compensation insurance bases monthly premiums on real-time payroll numbers. The alternative is basing premiums on annual payroll estimates, which might result in companies paying for coverage for workers they no longer employ.
If they so choose, LLC members can exclude themselves on top of getting affordable insurance, further lowering the cost of Workers’ Compensation insurance for their companies.
Get Workers’ Compensation Insurance in Georgia Today
To find a policy that suits your company’s needs, call the workers’ compensation insurance brokers for general contractors in Georgia at NPN Brokers today at (866) 340-9120.
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