Kentucky Workers’ Compensation

kentucky worker's compensation text overlaying image of louisville skyline If you run a business and have employees, you’ll need to purchase Kentucky workers’ compensation insurance. In fact, this type of insurance is a requirement in most states, including Kentucky, with some exceptions. It helps pay your employees’ medical bills if they sustain an injury on the job. And limits your liability for workplace accidents, is a requirement in most states, including Kentucky, with some exceptions. 

You can plan on paying around $0.91 for every $100 of covered payroll for workers’ compensation insurance in Kentucky. This means, for example, a business with a total annual payroll of $100,000 will pay around $910 for workers’ compensation insurance each year, or around $75 a month. These rates can fluctuate depending on a number of factors.

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The likelihood of an on-the-job injury at your workplace will help determine your workers’ compensation rates. When applying for your policy, you can classify different employees with different class codes to make sure you’re paying the right amount. For example, some office workers may have lower workers’ compensation costs than those who perform more labor-intensive tasks and are more vulnerable to injury.


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What’s Covered

If an employee sustains an injury on the job or becomes ill due to workplace conditions, workers’ compensation in Kentucky will help them with their medical bills. The average weekly wage of the employee determines the workers’ compensation benefits. The amount depends on the type of claim.

In general, workers’ compensation in Kentucky covers:

  • Accidents and injuries – If your employee needs medical attention, workers’ compensation will cover any medical expenses from a workplace injury.
  • Illness – If an employee becomes sick from exposure to allergens or other hazardous materials at work, they can also receive workers’ comp benefits to help pay for treatment.
  • Repetitive injury – It’s not just accidents that are covered: treatment for repetitive injuries, like carpal tunnel syndrome, are also covered by workers’ compensation. 
  • Ongoing care – If your employee still has medical needs as a direct result of their accident or illness, even after they return to work, they can get benefits for ongoing care. This includes additional doctor’s appointments or additional surgeries.

In addition, if their accident or illness results in permanent or temporary disability, your employee will receive weekly or lump sum payments. If they have a temporary disability, their injury prevents your employee from performing their job. But they can return to work as normal once they recover. If a doctor diagnoses them with an injury from which they will not fully recover, they have a permanent disability. 

These categories fall into the following classifications:

  1. Temporary total disability (TTD) – These payments will be made if your employee is not able to work at all while recuperating.
  2. Temporary partial disability (TPD) – TPD payments will be made if your employee can still work, but only with certain limitations, such as needing to perform lighter duties or work fewer hours. If your company does not provide work that meets these requirements, the employee may still be eligible for these payments.
  3. Permanent total disability (PTD) – Employees who are unable to work due to an accident or illness, even after they have recovered as much as they are likely to, will be eligible for PTD payments.
  4. Permanent partial disability (PPD) – Employees who have permanent difficulties but can work with them will be eligible for PPD.


Kentucky’s Workers’ Compensation Death Benefits

The surviving family members of an employee who passes away as a result of a work illness or injury may qualify for workers’ compensation death benefits.

Eligibility is based on a person’s relationship to the deceased employee, and their level of financial dependency on them.

In Kentucky, the following people are typically financially dependent on the employee:

  • A surviving spouse
  • Children younger than 18 who live at home with the spouse
  • Children younger than 22 who are in a higher education program
  • Adult children who are mentally or physically unable to support themselves, or who depended on the deceased worker for financial support in the past

Weekly death benefits of no more than 75% of the average weekly salary of the deceased employee are available to eligible family members. This amount cannot be greater than the state’s average weekly wage.

The amount of the weekly payment for partially dependent survivors will depend on how much they financially relied on the deceased.

Survivors qualify for payments for no more than 500 weeks, whether they are totally or partially dependent.

In Kentucky, if a worker passed away within four years of the date of the injury, qualifying family members may additionally be given a lump-sum payment for funeral costs. The lump-sum payment will be determined using the weekly average wage for the state.


Kentucky’s Workers’ Compensation Laws

Businesses in Kentucky that have one or more employees have to carry workers’ compensation insurance. Additionally, you’ll need verification of coverage, which is a letter from your insurance company including important details about your policy. In Kentucky, the law requires all employers to display proof of insurance on-site.

Certain employees are exempt from coverage under Kentucky’s workers’ compensation legislation, including:

  • Agricultural workers
  • Members of a religious group or sect that are morally opposed to insurance coverage
  • Housekeepers in a private residence with fewer than two other regular employees
  • Any person performing home improvement, maintenance, or repair work for a religious or philanthropic organization in exchange for food or other support for a period of fewer than 20 days

Employees are able to decline workers’ compensation coverage under Kentucky law by submitting a Form 4 Waiver to the Department of Workers’ Claims. The waiver remains in effect until the employee voluntarily revokes it.

Employees who opt out of coverage are still able to take their employer to court if they suffer a work illness or accident. In this case, the employer’s negligence or malfeasance must be proven by the employee.

Employers are not permitted by Kentucky law to require Form 4 Waivers as a condition of employment. Waivers must be signed willingly by employees if they are to be upheld. Employers may face penalties from the government if they demand Form 4 Waivers from their staff members.


How to Buy Workers’ Compensation Insurance

If you’re looking for workers’ compensation coverage in Kentucky, you should first look into getting a policy through a private commercial insurance company. EZ provides a simple online application for Kentucky businesses to compare quotes from top insurance carriers. As well as licensed agents with insurance expertise who can help you choose the best carrier and policy for your business.

If you are unable to obtain private insurance, you can purchase it through the Kentucky Employers’ Mutual Insurance Authority. A competitive state fund, which serves as the state’s assigned risk residual market. If you are unable to qualify for ordinary coverage because of your business’s high-risk status, this insurance coverage is your last resort.

If you meet the requirements, you can also choose to self-insure your workers’ compensation claims. You would then be responsible for covering your own workers’ compensation medical, rehabilitation, and death benefit payments rather than going through an insurance carrier. 

The state provides a systematic process for examining an employer’s capacity to self-insure their workers’ compensation claims, because self-insured businesses will be responsible for all workers’ compensation costs.

If you wish to become self-insured, you must complete Form SI-02, “Employer Application for Permission to Carry His Own Risk Without Insurance,” and provide your three most recently audited financial statements. A minimum of two months must pass between the submission of the application and the desired plan inception date.

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How to Get the Most Savings

The majority of the cost of workers’ compensation comes from factors beyond your control. However, there are still ways to save. Implementing a safety program is a great way to reduce workplace injuries and claims, which will lower your premiums. So regardless of your industry, it is important to have safety and standard operating procedures in place. Employees who have safety training are less vulnerable to injuries, lowering your workers’ compensation costs.

It is also a good idea to regularly review your claims history. Evaluating your claims history on a regular basis can help you identify and correct patterns. You might discover that certain aspects of your business operations are frequently causing claims. This allows you to adjust the operation to make it safer. You can save money by keeping an eye on potentially dangerous operations.

Correctly classifying your employees is one of the most effective ways to save money. When you apply for your workers’ compensation policy, you will classify each of your employees depending on their job’s risk. And this risk classification influences the cost of your workers’ compensation. For example, you might pay less to insure an office worker than you would a manual laborer. It’s also important to correctly classify your employees because you may receive a fine if you fail to do so.

Begin a free online application today to compare workers’ compensation insurance quotes for your small business from leading U.S. insurers. EZ’s agents specialize in insurance for a wide range of small businesses. Working with our agents can save you hundreds of dollars a year on coverage.


Kentucky Workers’ Compensation FAQs

  • Are you required to have workers’ compensation insurance in Kentucky?

Yes, businesses in Kentucky have to carry workers’ compensation insurance if they have one or more employees. You risk a fine of $1,000 per employee, per day if you fail to carry coverage. Additional penalties include:

    • Having your company shut down until you comply with the state’s workers’ compensation requirements
    • Further fines
    • Incarceration
  • How do workers’ compensation settlements work in Kentucky?

In Kentucky, workers’ compensation settlements are frequently made in the form of a lump sum. Some, however, employees received payment over a period of time. In contrast to many other states, Kentucky’s workers’ compensation agreements don’t always rule out the prospect of getting additional payouts. If your employee’s illness worsens within four years, the law permits the employee to reopen the claim.

  • What is the statute of limitations in Kentucky?

The statute of limitations for workers’ compensation claims in Kentucky is two years from the date of the incident. Or from the date of the final voluntary payment of disability benefits, whichever comes first.


Why Use EZ

We do everything in our power to make shopping for workers’ compensation insurance as easy and stress-free as possible. And we give each of our customers our undivided attention. As soon as you fill out our form, you will receive instant, free quotes from your dedicated agent. Who will give you personalized service and will work to understand your needs. We want to ensure that you get the best coverage at the best price. Our services are completely free so check out your quotes today!

If you still have questions, feel free to give us a call at 877-670-3538. You will speak to a local insurance agent who can answer all of your questions. And help you find the workers’ compensation policy that works best for your business.

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About The Author:
Cassandra Love

With over a decade of helpful content experience Cassandra has dedicated her career to making sure people have access to relevant, easy to understand, and valuable information. After realizing a huge knowledge gap Cassandra spent years researching and working with health insurance companies to create accessible guides and articles to walk anyone through every aspect of the insurance process.

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