A recent bill was passed that affects a significant amount of business owners in the United States. Assembly Bill 2883 will require that certain officers, directors, and partners of private corporations, partnerships, and limited liability companies (LLC) be covered under the business workers’ comp insurance policy. These individuals may have been excluded previously from coverage.
What Does This Mean For You?
The most important part of this bill to understand is that an officer of a corporation or partner of the business must own a minimum of 15% of the company in order to be excluded from the workers’ comp policy. Furthermore, all members must sign an exclusion form acknowledging that they have met the new criteria for being excluded. If you have a current workers’ comp policy in force, your insurance company should be mailing you the exclusion form for all of the members to sign. Be sure you have met the criteria before signing the form (must own 15%). You should then send the form back to your insurance company by January 1, 2017. If you do not send the form back in time or meet the criteria, the members of your corporation or partnership will be automatically included and you will be charged premium based on their payroll amounts.
Get Ahead Of The Game
Take action now and consult with your financial advisor as well as your insurance agent. You will need to make sure each member of your corporation or partnership that you want to exclude from Workers’ Comp coverage owns 15% of the company. If you haven’t already received an exclusion form from your insurance company, you can contact your insurance agent to obtain one. Have all members sign off on the form and return ASAP to make the 1/1/2017 deadline. If you have any questions regarding the new bill or your workers’ comp insurance policy, call Mitchell & Mitchell Insurance Agency in Novato at 415-883-2525 and we are happy to help. You can also contact Mitchell & Mitchell online and request a free comparison quote.