In Delaware, most employers are required to have workers’ compensation insurance, but it can be a little tricky to keep track of all the details. That is why we’ve developed this helpful guide that breaks down the specifics, including what these types of policies cover and how to stay compliant with state laws.
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What you’ll learn
How does workers’ compensation protect Delaware employers and employees?
Workers’ compensation insurance provides financial protection to employers in the event of work-related injuries or illnesses experienced by their employees. Generally, this type of insurance covers medical expenses, lost wages, and rehabilitation costs for employees who are injured or become ill while on the job and need time off to care for their health. Furthermore, employers can feel confident knowing that coverage generally shields them from lawsuits filed by employees due to work-related illnesses or injuries.
Delaware’s workers’ comp requirements
Employers with one (1) or more employees are required to carry workers’ compensation insurance, which is a “no-fault” insurance used to protect workers that get injured (or sick) while performing a job.
There can be some exceptions, according to delaware.gov. For example, farm workers are exempt from Delaware’s workers’ compensation statute, but these employers may choose to provide coverage. If a worker is classified as an independent contractor rather than an employee, they will not be covered.
Most of the time, Delaware business owners do not have to be included in their company’s workers’ compensation insurance plan, unless you’re a sole proprietor, or you’re part of a partnership that owns or manages your firm. That said, it depends on the owner’s on-the-job risks, and whether the cost of acquiring insurance is worth the protection received.
Do 1099 employees need workers’ comp in Delaware?
In Delaware, true independent contractors (those working under a 1099 arrangement) are generally not required to be covered under a workers’ compensation policy. However, if the contractor’s work arrangement functions like that of an employee, meaning the employer controls when, where, and how the work is done, they may legally be considered employees under Delaware law (Title 19, Chapter 23).
Keep in mind that misclassifying workers can lead to penalties and liability for unpaid benefits, so it’s crucial to assess the working relationship carefully before excluding them from coverage.
Does a sole proprietor need workers’ comp in Delaware?
Sole proprietors and business partners in Delaware are not automatically required to carry workers’ compensation insurance for themselves unless they have employees. However, they can choose to opt in for personal protection or, if a client contract requires coverage, to accept it.
If a sole proprietor hires workers, law mandates coverage under Delaware Code § 2306 of Title 19. Many self-employed professionals voluntarily purchase coverage to protect themselves against medical and income losses from work-related injuries.
How do Delaware employers purchase workers’ comp coverage?
Business owners can purchase workers’ compensation insurance from private insurance carriers. If you are unable to qualify this way, coverage can be purchased from DCRB Delaware. All employers are eligible as long as you’ve made a good-faith effort to find insurance elsewhere first. State law stipulates that two Delaware licensed insurance companies must have first declined to provide insurance for your company, in order for DIP to provide workers’ compensation coverage for your employees.
If an employee experiences a workplace injury or illness, employers are required to maintain a record of the incident, according to the Delaware Department of Labor. Additionally, employers are required to file a First Report of Occupational Injury or Disease within 10 days in writing to the Office of Workers’ Compensation as well as their insurance carrier. It is important to communicate any incidents, as failure to report a first injury could result in fines ranging from $100 to $250.
How much is workers’ comp insurance in Delaware?
Workers’ comp rates in Delaware depend on the business type, payroll size, and claims history. Premiums are calculated using class codes and experience modifiers defined by the Delaware Compensation Rating Bureau (DCRB).
The variance in premiums by industry can be extremely high and ranges from $6 per month for lower-risk industries like speech therapy to $896 per month for higher-risk industries like roofing. The average premium in Delaware was $0.96 per $100 in payroll.
What are the penalties for employers that fail to offer workers’ compensation insurance?
In Delaware, under Title 19 workers’ compensation regulations, if a business fails to provide workers’ compensation insurance for employees, they may be fined three times the amount equal to the insurance premium that should have been paid for one year. Additionally, if an employee gets hurt while at work and you don’t have a policy, there’s a possibility you could be liable for all of that employee’s associated medical costs and lost wages.
Is Delaware a National Council on Compensation Insurance (NCCI) state?
No, Delaware is not an NCCI state. Instead, it operates under the Delaware Compensation Rating Bureau (DCRB), which establishes its own classification system, rates, and experience modifiers. While NCCI governs most U.S. states, Delaware businesses must follow DCRB regulations when obtaining or renewing coverage. Employers with operations in multiple states should ensure their policies account for these differences to maintain compliance.
More resources for Delaware employers
Workers’ comp helps with compliance
Having a workers’ compensation policy helps your business stay compliant, but it is also the type of coverage that can be a difference-maker for you and your team. By having a policy, staffers can rest easy knowing that if work-related illnesses or injuries happen on the job, they’ll have coverage. On the flip side, employers can also feel confident that they’ll steer clear of any legal issues stemming from workplace sickness or accidents.
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.