Workers’ compensation insurance is one of those areas of running a business that we all know we should pay attention to, but which often suffers from neglect.  Usually that’s because business owners (including solo attorneys) know little about what workers’ comp is or where to obtain it.

Workers’ compensation insurance provides wage replacement and medical and rehabilitation benefits to employees injured during the course and scope of their employment.  Any person or firm who employs another person is required to pay for workers comp for the employee unless the employment relationship is exempt under Minn. Stat. § 176.041, subd. 1.  This means that solo attorneys will usually be required to obtain workers’ comp insurance for their legal assistants, secretaries, clerks, and other staff.

So while some solo attorneys may need to obtain workers’ compensation, can “true” solos buy the insurance?  While solo attorneys are on the job during most of their waking hours, many believe that they are precluded from purchasing workers’ compensation on themselves.  The opposite is true.  Minn. Stat. § 176.041, subd. 1a allows an owner of a business to elect to be covered by workers’ compensation insurance.

If you do not purchase long-term disability insurance, workers’ compensation may be even more important.  Solosmall attorneys seem to work 24/7/365.  There is a good chance that you could become disabled from an injury that arose out of the course and scope of your “employment” as an attorney.  It is, therefore, a low cost option to cover occupational injuries.

Furthermore, workers’ compensation insurance may be a good buy for you if you employ those covered by workers’ comp.  This is because wokers’ comp policies have a minimum premium requirement and the premiums often paid for paralegals, clerks, and secretaries may not reach the minimum premium.  There is no reason to overpay for clerical coverage when the difference between actual premium and minimum premium could be applied toward the cost to provide coverage for yourself.

Workers’ compensation insurance can be obtained through independent insurance agents, direct writing insurance companies and, as a last resort, the Minnesota’s Assigned Risk Plan.  The compensation class code for attorneys in Minnesota is 8820.  The rate for this class code is in the range of .30-.35% of payroll, depending on the insurer underwriting the coverage.  In 2012, the minimum and maximum payrolls subject to premium rating for sole proprietors, partners and officers is $23,296 and $93,184, respectively.  Assuming a class code rate of .33%, a solo attorney’s annual premium would not exceed $308 plus various debits and credits that apply in the standard premium formula and a $180 charge for an expense constant.

Visit Minnesota Workers’ Compensation Association at www.mwcia.org to calculate what your workers’ compensation premium is under the Assigned Risk Plan.  Provide the application and premium from the premium calculator function on the website to your insurance agent.  Ask the agent to place coverage for you using the information that you have developed from the MWCIA website.  The agent will submit your risk to the insurance companies that he or she represents.  If none of these insurers will offer to write coverage, then the agent will submit your application to the Assigned Risk Plan as the market of last resort.