Missouri Workers Comp

Missouri Construction Workers Comp: Why One Employee Triggers Coverage

Short answer. Under RSMo 287.030, a Missouri employer that erects, demolishes, alters or repairs improvements must carry workers compensation once it has one employee, while employers in other industries are required at five. Part-time workers, family members, corporate officers and LLC members count toward that threshold; sole proprietors and partners do not. TradeGuard Insurance writes Missouri workers comp for contractors and issues the certificate your general contractor asks for, the same day in most cases once the policy is bound. Call (913) 689-5474 or request a quote.

What Missouri law requires

Whether you have to carry coverage turns on the definition of “employer” in RSMo 287.030, and construction has its own, lower threshold:

One employee is enough in construction.

RSMo 287.030.1(3) sets the general threshold at five employees, “except that construction industry employers who erect, demolish, alter or repair improvements shall be deemed an employer for the purposes of this chapter if they have one or more employees.”

What counts as the construction industry.

The test is the work: if you erect, demolish, alter or repair improvements, you are a construction industry employer. The Division of Workers' Compensation says the law “does not contain a list,” but that carpenters, plumbers, electricians, roofers, painters, landscapers and concrete workers, among others, generally fall within the contracting classification codes.

Part-time and family employees count.

The Division states that the requirement applies “regardless of whether the employees are part-time/casual laborers, full-time, or family members.” RSMo 287.030 adds that a relative within the third degree “shall be counted in determining the total number of employees.”

A policy from an authorized carrier, or approved self-insurance.

Under RSMo 287.280, every employer subject to the law must insure its entire liability “with some insurance carrier authorized to insure such liability in this state,” unless the Division approves the employer to self-insure.

Who counts: owners, partners, LLC members and officers

It depends on how your business is organized. The Division puts it this way: “Members of an LLC and officers of a corporation apply towards this employee count, sole proprietors and members of a partnership do not.” The main rules for owners are below; this list is not exhaustive.

Sole proprietors and partners: not counted, covered only if they elect.

Sole proprietors and partners are covered only if they elect coverage for themselves. Under RSMo 287.035, benefits apply to them “only when such partners or sole proprietors have individually elected to procure insurance policy protection for themselves.” The Division's construction pamphlet adds that if the only people working in the business are the sole proprietor or the partners, “workers' compensation insurance is not required by the Law.”

LLC members: counted, covered unless they reject.

LLC members are covered unless they validly reject coverage; a member who rejects is not entitled to benefits under that policy while the rejection is in effect. Under RSMo 287.037, a member rejects by written notice, on a Department of Commerce and Insurance form, to the LLC and its insurer, and can later rescind the rejection in writing for benefits going forward.

Corporate officers: counted as employees.

RSMo 287.020 defines an employee to include “executive officers of corporations.” Under RSMo 287.090.5, a corporation may withdraw from the law only when there are no more than two owners who are also the corporation's only employees, and only by filing a notice of election to be withdrawn with the Division.

S corporation shareholders with 40% or more: may reject individually.

Since January 1, 2018, RSMo 287.037.2 lets a shareholder with at least a 40% interest in an S corporation reject personal coverage by written notice to the corporation and its insurer. The Division's construction pamphlet says a construction S corporation still needs a policy on the corporation itself unless it has withdrawn under the two-owner rule.

Why your general contractor asks for a workers comp certificate

Under RSMo 287.040.2, a contractor “shall be deemed to be the employer of the employees of his subcontractors and their subcontractors when employed on or about the premises where the principal contractor is doing work.” The immediate employer is primarily liable and the contractors above it secondarily, and no one up the chain is liable “if the employee was insured by his immediate or any intermediate employer.”

A general contractor can face secondary workers comp liability for a subcontractor's uninsured employees under Missouri law (RSMo 287.040, subsections 2 and 3). The Division's construction pamphlet also says the GC's insurer will charge additional premium if a subcontractor “cannot provide proof of coverage, even if the subcontractor has no employees.” That is why subcontract agreements ask for a current certificate. For how certificates work, see certificates of insurance.

If you have no employees, or only working owners

A business whose only workers are its sole proprietor or partners is not required by Missouri law to carry workers comp. Many general contractors require a certificate anyway, and the Division's pamphlet says the subcontractor then “would need to buy a policy covering his/her business or him/herself or work for a general contractor who does not make this a requirement.”

A construction LLC is different. The Division of Workers' Compensation's construction pamphlet says an LLC subject to the law must carry coverage even when its workers are all members, and its employer guidance says members count toward the threshold. A construction LLC may need a workers comp policy even when its only worker is a member. If that member rejects personal coverage, we confirm the right policy structure with the insurer. Rejecting means the member gives up benefits under that policy for their own injuries until the rejection is rescinded in writing.

Corporate owners follow their own rules: officers count as employees, and the two-owner withdrawal under RSMo 287.090.5 and the S corporation rejection under RSMo 287.037.2 each have the conditions described above.

Some contractors use the informal term ghost policy for a minimum-premium workers comp policy written for a business with no employees, usually to produce a certificate a GC requires. Confirm what the policy covers, any owner exclusions and its audit terms before buying. We write minimum-premium workers comp policies in Missouri and Kansas.

What happens if you do not carry it

  • Knowingly failing to insure. Under RSMo 287.128.7, an employer who knowingly fails to insure its liability is guilty of a class A misdemeanor and is liable to the state for a penalty of up to three times the annual premium it would have paid or up to $50,000, whichever is greater. A person previously found guilty of violating section 287.128 who violates it again is guilty of a class E felony.
  • Lawsuits from injured workers. Under RSMo 287.280, an injured employee of an employer that has not insured as required may sue for damages, and the employer cannot defend by blaming a co-worker, the employee's own negligence, or assumption of risk.
  • City and county licenses. Under RSMo 287.061, a Missouri city or county that licenses construction contractors must require a workers comp certificate or an affidavit of exemption, and a contractor who provides neither “shall be denied such a license.”
  • Invalid certificates, a separate offense. RSMo 287.128.5 makes it unlawful for any person, company, or other entity “to prepare or provide an invalid certificate of insurance as proof of workers' compensation insurance,” and a violation of that subsection is a class E felony.

If you are applying for a contractor license in Kansas City, see Kansas City, Missouri contractor license insurance.

Missouri versus Kansas

Missouri counts employees; Kansas uses a payroll test. For an employer with a prior calendar year, the Kansas exception requires both prior-year payroll of no more than $20,000 and a reasonable current-year estimate of no more than $20,000, and a separate provision covers new employers (K.S.A. 44-505(a)(2) and (a)(3)). If you also work in Kansas, see Kansas contractor workers comp requirements and Johnson County contractor license insurance.

How TradeGuard handles Missouri construction workers comp

  1. 1You call or request a quote with your business name and the work you do, and send us the insurance section of your GC's subcontract if you have one.
  2. 2You tell us your entity type, working owners, employees and any coverage elections. We go through who counts under RSMo 287.030 before we quote.
  3. 3We quote workers comp from insurers authorized to write it in Missouri and bind the policy. If an LLC member rejects personal coverage, we confirm the right policy structure with the insurer.
  4. 4If your contract requires a workers comp waiver of subrogation, we ask the insurer for the endorsement.
  5. 5We issue the certificate of insurance to your general contractor, the same day in most cases once the policy is bound, and often within minutes for policies written through TradeGuard.
  6. 6We track your policy renewal and send your GC an updated certificate when the policy renews.

TradeGuard Insurance is a licensed insurance agency (NPN 22154473) based in Leawood, Kansas. We are licensed in Missouri and can quote and place policies in all 50 states.

Get Missouri workers comp and your GC's certificate today.

Call (913) 689-5474 or request a quote.

Request a Quote Call (913) 689-5474

Frequently asked questions

Yes, if you are in construction. RSMo 287.030 requires construction industry employers, those who erect, demolish, alter or repair improvements, to carry workers compensation once they have one employee. Employers in other industries are required at five employees. Part-time workers and family members count.

It may. The Division of Workers' Compensation's construction pamphlet says an LLC subject to the law must carry coverage even when its workers are all members, and its employer guidance says members count toward the threshold. Under RSMo 287.037 the member can reject personal coverage by written notice to the LLC and its insurer, but a member who rejects is not entitled to benefits under that policy while the rejection is in effect.

No. Sole proprietors and partners are not counted as employees and are covered only if they elect coverage for themselves under RSMo 287.035. Your general contractor may still require a workers comp certificate. Some contractors use the informal term ghost policy for a minimum-premium workers comp policy written for a business with no employees; confirm what the policy covers, any owner exclusions and its audit terms before buying.

It can be. A general contractor can face secondary workers comp liability for a subcontractor's uninsured employees under Missouri law (RSMo 287.040, subsections 2 and 3). The immediate employer is primarily liable, and the contractors above it are not liable if the employee was insured by the immediate or any intermediate employer. That is why GCs ask subcontractors for a workers comp certificate.

Under RSMo 287.128.7, an employer who knowingly fails to insure is guilty of a class A misdemeanor and is liable to the state for a penalty of up to three times the annual premium it would have paid or up to $50,000, whichever is greater. A person previously found guilty of violating section 287.128 who violates it again is guilty of a class E felony.

Same day in most cases once the policy is bound, and often within minutes for policies written through TradeGuard.