Worker's Comp Insurance | Are You Properly Covered?
Common Workers' Compensation
Insurance Mistakes
Many businesses are unknowingly operating out of compliance—either because they never had coverage when required, or because they let their policy lapse and are now struggling to get it reinstated.
Unfortunately, by the time employers realize the problem, it’s often after an injury has already occurred—and the financial and legal consequences can be devastating.
What is a Workers' Compensation Insurance Policy?
Your employees are your most valuable resource—and protecting them is even more important than protecting any other aspect of your business. That’s why workers’ compensation insurance is not optional; it’s essential.
Workers’ compensation insurance ensures that your employees are protected if they suffer a work-related injury or illness, regardless of who was at fault.
Health or medical insurance does not substitute for workers’ comp coverage. Employees are only covered for on-the-job injuries or job-related illnesses—and without a valid policy, those costs fall directly on the employer.
Coverage typically includes:
- Medical expenses: doctor visits, physical therapy, prescriptions, and hospital stays
- Wage benefits: compensation for lost income during recovery
- Disability benefits: if an injury results in partial or permanent disability
- Death benefits: payments to dependents if a workplace injury results in death
Did you know?
Workers’ compensation coverage is necessary regardless of fault—meaning even if an employee’s own negligence caused the incident, they’re usually still eligible for benefits
The Biggest Problem: Missing or Lapsed Coverage
The most common issue facing employers today is operating without workers’ compensation coverage—either because they didn’t know they needed it or they let it expire without realizing the implications.
Once coverage lapses, most insurers view your business as high-risk, making it much harder and more expensive to secure a new policy. Some carriers may even deny coverage entirely until you demonstrate a consistent history of compliance.
If your business has one or more employees and you do not carry workers’ compensation insurance, you are legally and financially responsible for:
- All medical and rehabilitation costs
- Lost wages
- Potential legal settlements or lawsuits
Did You Know? States that require workers’ comp coverage impose significant penalties for companies that don’t comply.
Here’s how it breaks down in our region:
- Pennsylvania: Fines up to $2,500 per day and possible misdemeanor or felony charges.
- Delaware: Fines up to $10,000 per violation for noncompliance.
- Virginia: Civil penalties up to $250 per day, capped at $50,000, and potential stop-work orders.
- Maryland: Fines up to $10,000 and possible criminal prosecution.
Even more alarming, some states can revoke business licenses or shut down operations until compliance is restored.
How to Get or Reinstate Workers’ Compensation Insurance
1. Contact your trusted insurance specialist
Work with an expert like CNS Insurance, who understands transportation, logistics, and multi-state coverage requirements.
2. Determine your classification codes
Each employee type is assigned a risk-based code by NCCI or your state’s rating bureau, which affects your premium. Accurate coding prevents costly audit adjustments later.
3. Estimate and monitor payroll
Your workers’ comp premium is based on payroll. Regularly report changes to avoid surprise bills or coverage gaps.
4. Review your policy annually
Each renewal includes an audit—use it to confirm employee classifications, payroll updates, and state coverage needs.
5. Consider multi-state policies
If employees work or travel across PA, DE, VA, or MD, you may need multiple policies or an endorsement to ensure coverage applies in every state.