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What happens if I don't buy workers' comp for my Pennsylvania business?
You really don’t want to go without workers’ comp. The consequences could include hefty fines, jail time, and lawsuits. (Read more here about whether you need workers’ comp for your Pennsylvania business here.)
To better understand what would happen, let’s look closer at what Pennsylvania law says about the potential criminal and civil consequences.
Here are the criminal consequences for going without workers’ comp
If an employee who doesn’t have coverage is injured on the job, an employer (that’s you) could be charged with a misdemeanor and have to pay as much as $2,500—or even face one year in prison—for each day that you were without worker’s comp. Whew. And that’s just if the state believes it was unintentional.
If the Bureau Of Workers Compensation can prove that you intentionally avoided buying worker’s comp, not only would you be charged with a felony—and possibly be out $15,000—you could face up to seven years in prison for every day you were without coverage.
But it’s not just prison time and felony charges you’d have to worry about.
Here are the civil consequences for going without workers’ comp
Pennsylvania provides a backup plan for any employee who gets injured on a job without workers’ comp coverage. The Uninsured Employers Guaranty Fund is there specifically to cover the medical fees for these employees. The thing is, once the employee is taken care of, the state immediately goes after the employer for compensation: penalties, interest, and—you guessed it—more legal fees.
There’s more. Having workers’ comp protects your business from many kinds of lawsuits that could be brought against you by an injured employee. Without that coverage, your employees are free to sue you for damages related to workplace injuries and illnesses. You could be sued for all sorts of things, including negligence, lost wages, and pain and suffering. The cost of settling in a lawsuit would likely be far more than the cost of purchasing workers’ comp coverage in the first place.
Finally, the cost for workers’ comp could go up
Look, there’s no getting out of buying workers’ comp—if you want to stay in business, you’ll eventually need to purchase coverage. And if you’ve been going without coverage illegally for any length of time, you probably won’t be happy with your quote.
Insurers always check for lapses in coverage before they give you a quote for workers’ comp. If an insurer finds that you’ve ever let your employees go without coverage, they’ll either quote you a higher rate or refuse to insure you at all. (In that case, you might be stuck purchasing insurance from the State of Pennsylvania. Which is often much more expensive.)
In the end, going without workers’ comp just isn’t worth it. You could face lawsuits, fines, and prison time. Do the right thing and protect your employees and your business with a workers’ comp policy (getting a quote from Huckleberry generally takes less than ten minutes).
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