FAQ: Workers' Compensation Insurance in Utah

Workers' compensation insurance is a no-fault commercial insurance policy designed to protect employers and the people who work for them.

It protects your business by shielding your company from financial losses and potential liability lawsuits if an employee is severely injured on the job or is stricken with an occupational illness. 

It protects your employees by ensuring that they will have full coverage for all necessary medical care and related expenses if they are injured on the job, so they do not suffer a significant financial setback due to lost wages.

Utah is among the least expensive states for workers’ compensation insurance. Costs are based on the number of employees you have, how much they are paid, the types of jobs they perform, and your company's history of accidents and workers’ compensation claims. 

The Utah Department of Insurance assigns every occupation a base rate for coverage according to the likelihood that an employee will be severely injured. Insurance companies must use these assigned rates, but costs can vary from one provider to the next because they are permitted to make adjustments up to 25% using policy credits and debits.

The following are examples of workers' compensation cost ranges per $100 of employer payroll for a few different occupations in Utah:

  • Landscapers:  $2.16 to $4.64
  • Tree Trimmers/Removers/Pruners:  $4.75 to $10.21
  • Plumbing Contractors:  $1.46 to $3.14
  • Retail Store Workers:  $0.68 to $1.46
  • Clerical/Office Employees:  $0.07 to $0.15
  • Restaurant Workers:  $0.68 to $1.46

Employers with a solid employee safety record will pay rates at the lower end. Those whose history of worker injuries exceeds industry expectations will pay rates at the higher end.

Utah state law requires all employers to carry workers’ compensation insurance. There are a few exceptions. Sole proprietors and partners with no employees do not need coverage. You are also not required to purchase coverage for:

  • LLC members, except in the construction industry
  • Up to five directors and officers of a corporation
  • Independent contractors
  • Casual employees
  • Household/domestic workers
  • Some agricultural or horticultural laborers
  • Some real estate and insurance brokers

Workers' compensation insurance can be purchased from a commercial provider or through the state-administered fund in Utah. With approval, companies with a solid financial standing may opt to self-insure.

In Utah, workers' compensation insurance provides injured employees with three essential types of coverage: medical benefits, indemnity benefits, and death benefits.

Medical Benefits

If an employee is injured on the job or is diagnosed with an occupational illness, workers’ compensation insurance can cover the cost of all reasonable and necessary medical care so that the employee pays nothing out of pocket. This includes coverage for:

  • Visits to the treating physician
  • Hospital stays
  • Follow up care
  • Physical therapy
  • Medications
  • Prosthetic devices and medical supplies

Workers’ compensation can even reimburse employees for mileage to and from their medical appointments. These benefits will continue for as long as treatment is needed.

Indemnity Benefits

Indemnity benefits replace a large portion of an injured employee’s lost income. They do not suffer a significant financial setback if they must take more than three days off work to recuperate. These benefits include:

  • Temporary partial disability (TPD)
  • Temporary total disability (TTD)
  • Permanent partial disability (PPD)
  • Permanent total disability (PTD)

The payment amounts the employees will receive depends on their income before the incident and the nature and severity of their injury. Coverage for temporary disability is capped at 312 weeks. Permanent disability coverage can continue for as long as the employee is disabled.

Death Benefits

Unfortunately, workplace injuries and illnesses are sometimes fatal. Approximately 50 deaths are reported in Utah every year.

In the event of a fatality, workers’ compensation insurance can help cover the cost of the employee’s funeral and burial costs and provide ongoing benefits in the form of compensation to their spouse and dependents.

Workers’ compensation covers a lot of worker injuries, but it does have some exclusions.

Workers' compensation typically excludes coverage for:

  • Employee injuries sustained outside of work
  • Accidents that occurred while the injured employee was under the influence of alcohol or illegal drugs
  • Intentional or self-inflicted injuries
  • Injuries that occur while an employee was engaged in horseplay or was committing a serious crime

If an employee believes that their claim was unjustly denied, they can contact the Intake Claims Department of the Utah Industrial Accident Division to try to work out a resolution. If they cannot come to an agreement, the employee can file an Application for Hearing with the Labor Commission’s Adjudication Division.

Contractors are frequently asked to provide proof of workers’ compensation coverage, particularly if doing work for a governmental entity. This is because their clients want to be certain that they will not be named in a liability lawsuit if a worker is injured while doing a job on their property.

If a prospective client asks you for proof of coverage, you can show them a workers’ compensation insurance certificate. This certificate, which is issued by your insurer when you purchase or renew your policy, is a single-page document that provides information about your coverage, including details like:

  • Name and address of the insured
  • Name of the insurance company and all policy numbers
  • Effective date and expiration date for each policy listed

Alternatively, your clients can look up your workers’ compensation coverage status using an online search since the state of Utah keeps a database of all current workers' compensation policies.

Utah also has what is referred to as an extra-territorial certificate. Extra-territorial coverage is when insurers extend coverage to workers who are doing jobs outside of Utah. An extra-territorial certificate notifies the other state that the employee is covered and provides details about the coverage.

Independent insurance agents make it easy to find the right workers’ compensation coverage because they do the comparison shopping for you. These agents can take the time to answer your coverage-related questions and explain the fine details of your policy choices.

No business is too small to benefit from the help of an independent agent. Arrange an obligation-free consultation with an independent insurance agent near you to compare a selection of customized quotes from some of the best workers’ compensation insurance companies in Utah.

No. Workers' compensation benefits are not considered taxable income.

What Are the Best Workers' Compensation Insurance Companies in Utah?

National Average Cost of Workers' Compensation Insurance

Healthcare $1,825 Per $100,000 payroll

Retail Trade $2,850 Per $100,000 payroll

Construction $7,430 Per $100,000 payroll

Workers' Compensation Insurance Laws in Utah

  • With few exceptions, all employers in Utah are required to carry workers’ compensation insurance.
  • Employers are required to post notice of coverage at all work sites in a conspicuous location. Notices may be obtained free of charge through the Labor Commission’s website under Industrial Accident Resources.
  • Upon being notified of a work injury or occupational illness, employers must report the claim to their insurance company within seven days. This can be done by completing and filing Form 122e, “Employer’s First Report of Injury or Illness.” A copy of Form 122e must be given to the injured employee.
  • Employers may not intimidate, coerce, or harass employees in an attempt to prevent them from filing a workers’ compensation claim. This is Unlawful Interference, and it is punishable by fines of up to $5,000.
  • Failure to carry required workers’ compensation insurance in Utah can lead to penalties, including fines starting at $1,000, increased insurance premium rates, and a stop-work order until coverage is obtained. Additionally, the uninsured employer will be liable for costs incurred by injured workers.

 

Common Workers' Compensation Claims in Utah

Every year, there are around 30,000 workers' compensation insurance claims filed in Utah.


Top 10 Occupations with the Most Workers’ Comp Claims:

  1. Nursing assistants
  2. Heavy truck and tractor-trailer truck drivers
  3. Freight, stock, and materials movers
  4. Light truck drivers
  5. Construction workers
  6. Maintenance and repair workers
  7. Stockers and order fillers
  8. Janitors and cleaners
  9. Registered nurses
  10. Retail salespeople


Top 5 most reported worker injuries in Utah:

  1. Overexertion injuries: This includes sprains and strains related to lifting, carrying, pushing, pulling, and throwing.
  2. Slipping and tripping: This includes slips on wet and/or slippery floors and surfaces and trips over items on the floor. These typically result in same-level falls.
  3. Reaction injuries: This typically includes injuries where there was no contact with another object, such as strains from a slip where there was no fall, and pain from excessive bending, standing, sitting, or reaching.
  4. “Walking into” injuries: These include injuries where an employee is injured by accidentally running, walking, or backing into a wall, door, cabinet, furniture, or things stacked in a passageway.
  5. Falls from a height: This includes falls down stairs, off ladders or scaffolding, or from trees or roofs.

Insurance companies pay out about $1.5 billion a year in workers’ compensation claims in Utah.