Virginia Worker Comp Insurance Obligations

Virginia law requires every employer who regularly employs three or more full-time or part-time employees to purchase and maintain workers' compensation insurance.  Employers with fewer than three employees may voluntarily come under the Act.

Purchase and maintain a workers' compensation policy from a company licensed in Virginia; Apply to the Virginia Workers' Compensation Commission for approval as an independent self-insurer; Become a member of a group self-insurance association licensed by the Virginia State Corporation Commission; or Enter into an agreement with a professional employer organization as provided in Section 65.2-801.A.4 of the Code of Virginia. Sole proprietors and partners are considered owners of businesses and are not covered by workers' compensation.  However, sole proprietors and partners may elect to obtain coverage for workers' compensation liability by purchasing insurance.

Members of a limited liability company (LLC) are considered to be owners of a company and are not covered by workers' compensation unless specifically covered by an insurance policy or either elected or appointed as a manager.  The manager of an LLC is treated as a corporate officer under the Act.  

A corporation's officers may choose to reject workers' compensation coverage for accidents, but not for occupational diseases.  To do so, officers must file a "Notice of Rejection" with the insurer and with the Commission.  If the officers are paid regularly, they are nevertheless counted as employees to determine jurisdiction under the Act.  Note:  For non-profit corporations under §501(c)(3) of Title 26 of the U.S. Code, unpaid officers are not considered employees.  Unpaid officers need not formally reject coverage and are not counted as employees in determining jurisdiction under the Act.