Does a Single Member LLC Need Workers’ Comp Insurance in Georgia?
"*" indicates required fields
If you own a single LLC in Georgia, you may need Workers’ Compensation insurance, depending on the number of workers you employ.
Single-member LLCs in Georgia with more than two employees, not including the owner, will need Workers’ Compensation. Single LLCs with fewer than three workers won’t be required to get coverage. Owners of single-member LLCs can exempt themselves from insurance in Georgia, which can reduce their monthly premiums. A single-member LLC that needs Workers’ Compensation and doesn’t get it can face financial penalties and other consequences. Such companies will also have to provide benefits to injured workers if they don’t have insurance in Georgia.
To learn more about coverage for single-member LLCs, reach out to our Georgia Workers’ Compensation insurance brokers by calling NPN Brokers today at (866) 340-9120.
Workers’ Comp Insurance Requirements for Single Member LLCs in Georgia
Single-member LLCs can choose to have employees or not have employees. Based on this decision, a single-member LLC might have to get Workers’ Compensation insurance in Georgia.
Single Member LLCs with Employees
Single-member LLCs can elect to be treated as a corporation, allowing them to hire employees. Any single-member LLC, meaning an LLC with one owner, that has more than three employees, not including the owner, must have Workers’ Compensation in Georgia. Coverage is mandatory, regardless of the industry a single-member LLC operates in.
Single Member LLCs without Employees
Single-member LLCs can elect not to be treated as a corporation and instead be treated as a disregarded entity. This means they cannot have employees, and the sole member will not be treated as an employee. In this instance, or when an incorporated single-member LLC has fewer than three workers, the company will not need Workers’ Compensation insurance in Georgia.
Workers’ Comp Insurance Exemptions for Single Member LLCs in Georgia
There are Workers’ Compensation insurance exemptions for LLC members in Georgia. These exemptions also apply to owners of single-member LLCs.
In Georgia, up to five members of the same LLC can exempt themselves from Workers’ Compensation coverage. If you own a single-member LLC and you are the sole member, you can file an exemption from coverage for yourself. You may still need Workers’ Compensation for your employees if you have above the payroll threshold for mandatory coverage in Georgia.
If you file for an exemption as an LLC member, you will be unable to claim Workers’ Compensation benefits if you are injured on the job. To file for an exemption as the owner of a single-member LLC, you must submit Form WC-10 to the Georgia State Board of Workers’ Compensation or your insurance carrier.
Workers’ Comp Insurance Plans for Single Member LLCs in Georgia
Single-member LLCs can benefit from getting certain types of Workers’ Compensation plans in Georgia. These include pay-as-you-go policies and other affordable plans from flexible Workers’ Compensation insurance carriers.
The main difference between single-member LLCs and sole proprietorships is that single-member LLCs have provide a legal distinction between the owner and the company. Apart from that, single-member LLCs and sole proprietorships are relatively similar in that they are often small businesses with few employees.
If you have a small number of employees or the payroll of your single-member LLC is constantly changing, you may benefit from getting pay-as-you-go Workers’ Compensation in Georgia. This allows you to lower monthly premiums and only pay for insurance for current employees.
Despite a single member LLC’s payroll information, our Georgia Workers’ Compensation insurance brokers can find other affordable policies for such companies. These include plans that do not mandate expensive deposits, complicated contracts, or lengthy audits.
Depending on the carrier, a single-member LLC might be seen as a higher risk to insure. Risk factors include how long a single-member LLC has been operating, its history of workplace accidents, and its number of employed workers. A company’s industry might also impact premiums, meaning single-member LLCs in more dangerous industries might be charged more for Workers’ Compensation in Georgia.
What if a Single Member LLC Doesn’t Get Workers’ Comp Insurance in Georgia?
If a single-member LLC with more than two employees fails to get Workers’ Compensation in Georgia, it may face penalties from the state. Single-member LLCs might also be finically liable for providing compensation to workers injured on the job.
In Georgia, companies that need Workers’ Compensation but fail to get it, including single-member LLCs, can be fined between $500 and $5,000 per violation. In addition to these financial penalties, employers might be fined up to $1,000 for failure to submit the necessary forms to the Georgia Board of Workers’ Compensation, such as proof of insurance, per violation. There may be additional criminal penalties of up to $10,000 for non-compliance or a year in jail for single-member LLCs that do not get Workers’ Compensation when mandated to in Georgia.
Liability for Injuries
In addition to fines and possible imprisonment, owners of single-member LLCs might become responsible for paying damages to an injured worker if they do not have Workers’ Compensation. In Georgia, non-compliant companies must pay damages to injured employees that are equitable to Workers’ Compensation benefits. This will include compensation for a portion of an injured worker’s lost wages as well as medical expenses related to their injuries. Because single-member LLC owners are separate from their companies, they won’t personally have to foot the bill: the company will have to. That said, failing to have insurance can cause significant financial troubles for a company that has to provide benefits to an injured worker out of pocket.
Get Workers’ Comp Insurance for Your Georgia Single Member LLC Today
Call our Georgia general contractors’ Workers’ Compensation insurance brokers at (866) 340-9120 to get a quote from NPN Brokers today.