In construction, accidents happen. Whether it's a fall, an equipment mishap, or just a slip on a slick surface, the risk of injury is real. That's where Workers' Compensation insurance comes in—it’s a safety net for workers who get hurt on the job. This insurance covers the medical expenses of employees injured on-site and helps compensate them for any lost income due to work-related injuries.

The best part? It’s a no-fault system. That means employees are covered, no matter who caused the accident—whether it was the worker, employer, or even a third party. Workers' Comp provides peace of mind that medical bills will be paid and some portion of wages will be recovered while they recover.

Now, here’s where things can get a bit tricky—every state has its own set of rules and regulations for Workers' Compensation insurance. Each state decides the minimum coverage (also called statutory limits) businesses need to carry. So, if you’re a contractor or subcontractor, you need to make sure your Workers' Comp policy meets the specific requirements of the state you're working in.

It’s easy to confuse Workers' Compensation with Employers' Liability, but they’re not the same! While these two coverages are often bundled together, they serve different purposes and have different limits.

Workers' Compensation (Part 1): This is the part that covers an employee’s medical bills and lost wages due to job-related injuries or illnesses, no matter whose fault it is. Whether the accident was caused by the employee, employer, or someone else, Workers' Comp pays out.

Employers' Liability (Part 2): This comes into play when an employee sues the employer for negligence. If the employer’s actions (or lack of actions) led to the accident, and the employee files a lawsuit, Employers' Liability covers those legal costs and any damages awarded.

In short: Workers' Comp is all about making sure employees get the medical care and financial support they need after an injury, while Employers' Liability protects the business if the employee blames the employer for the accident.

Each state decides the minimum limits for Workers' Comp coverage, known as statutory limits. On a COI (Certificate of Insurance), you’ll see a section called "Per Statute" that indicates whether the policy meets the state’s requirements. If the "Per Statute" box is marked, you’re good to go! But if it’s left blank or marked "Other," the policy might not meet the required limits—which could mean trouble for your business.

It’s important to know that this doesn’t apply in Texas (which doesn’t have statutory limits) or in monopolistic states like Washington, Ohio, Wyoming, and North Dakota. These states handle Workers' Comp a bit differently, so if you're working there, be sure to check their specific requirements.

In certain states, known as monopolistic states, employers are required to buy Workers' Compensation insurance directly from the state itself. These states include North Dakota, Ohio, Oregon, Washington, and Wyoming. If you're working in one of these states, you won’t have the option to shop for Workers' Comp through private insurers. Instead, you'll purchase coverage through the state-run program.

For contractors and construction businesses operating in these monopolistic states, it’s essential to understand that these state programs are your only source of Workers' Compensation coverage. This ensures compliance with state laws while providing the protection workers need on the job.

In the construction world, Workers' Compensation is essential for protecting both employees and businesses. With the right coverage, your workers are taken care of, and you can avoid costly lawsuits—all while staying compliant with state laws!