What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Kentucky

When hiring employees in Kentucky, businesses must secure specific types of insurance to comply with state requirements and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most employers in Kentucky. This insurance covers medical expenses and lost wages for employees who are injured or become ill due to job-related activities.

• Required for businesses with one or more employees.
• Must be obtained before employees begin work.
• Ensures compliance with Kentucky's workplace injury laws.

Unemployment Insurance

Employers in Kentucky are also required to pay into the state's unemployment insurance program. While this is not a policy the employer buys directly, it is a tax obligation that funds unemployment benefits for eligible former employees.

• Register with the Kentucky Office of Unemployment Insurance.
• Report payroll and pay unemployment taxes quarterly.

Additional Insurance Considerations

Though not legally required, consider these insurance types to support your workforce and manage operational risks:

• General liability insurance to protect against third-party claims.
• Health insurance if you meet the Affordable Care Act employer mandate thresholds.
• Disability insurance options to support employees unable to work due to non-work-related injuries or illnesses.

Operational Tips for Compliance

• Verify coverage limits meet Kentucky state minimums.
• Maintain accurate recordkeeping of insurance policies and employee claims.
• Automate payroll and tax reporting to ensure timely unemployment insurance payments.
• Review insurance requirements annually to stay updated with any changes.