Are You Properly Insured in VA?


Virginia’s 2014 General Assembly approved an increase in the civil penalty imposed when an employer fails to properly insure, as required by the Workers’ Compensation Act. Amendments to Section 65.2-805 expose an employer in violation of this law to a civil penalty of not more than $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000, plus collection costs. The amendments are effective July 1, 2014.

As summarized by the Virginia Workers’ Compensation Commission, Virginia law requires an employer to insure in Virginia when they regularly employ more than two part-time (or full-time) employees. In addition, a business that hires subcontractors or another business(es) to assist it in its trade or to fulfill a contract must count the subcontractor’s or other business’ employees as well as its own employees in determining the total employees for coverage requirements. It further explained that, for a contractor whose work varies, the Commission will look to the “established mode” of performing work and, a contractor that hires one or more subcontractors with employees to accomplish their business, will be required to carry workers’ compensation insurance.

It cautions employers that the term “employee” is defined broadly under Virginia law and includes every person in the service of another under any contract of hire, written or implied, lawfully or unlawfully employed, and “employee” includes statutory employees (subcontractor’s employees), corporate officers, minors, aliens, working family members, apprentices, temporary and seasonal employees; designating a worker as an “independent contractor” does not necessarily mean they are not an employee. The workers’ compensation insurance coverage requirements focus on number of employees, and a business that doesn’t count all of its employees may not realize it is required to carry coverage.

Workers’ compensation is mandatory coverage. Virginia law does not permit other forms of insurance as a substitute. Failure to properly insure due to lack of knowledge will not excuse an employer’s failure to comply with Virginia’s Act or protect the employer from civil penalties.

Virginia workers’ compensation information is available at For specific coverage questions, contact the Insurance Department of the Commission at or by phone at (804) 205-3586.

Additional Source: Commonwealth of Virginia, Virginia Workers’ Compensation Commission, Important Notice for Employers