Insureon and online small business directory Manta, put out a poll to over 900 small business owners and found that almost one third of them do not have workers’ comp insurance, and another third are not sure of whether they need it or not.

The poll responses show 26 percent of small businesses with employees do not have comp insurance and 30 percent are unsure of whether they need it. Another 19 percent who had employees working remotely in other states responded that they were not sure if they needed comp insurance for those employees.

This could put those business owners at risk for fines and punishments, maybe even jail time, if they are found not to be carrying the proper coverage. It could bankrupt them as well.

“Each small business needs to be up-to-date on what its state, and the states it has employees in, requires for workers’ compensation insurance,” said Jeff Somers, president of Insureon. “The onus and responsibility starts with the small business owner who needs to know what is required of them, not just to meet the requirements of the law, but to protect their business that they’ve worked so hard to build.”

For example, in Illinois a business owner without comp can be fined $500 per employee, per day, they the business is without coverage. In New York that could be as high as $5,000 per day for employers with more than five employees. California may impose jail time on employers. An accident could be devastating to a small business owner who does not carry comp insurance.

Anthony Gottschlich of the Ohio Bureau of Workers’ Compensation says that it is difficult to find and educate businesses who are not carrying the proper comp coverage. The BWC does outreach for small business groups and startups, but it’s difficult to determine if everyone that needs it has it. He also said they know there are those who willfully ignore their legal obligations and the BWC works with them to try to get them into compliance. If they are not successful they involve their special investigations department.

“Ohio law requires all businesses with one or more employees (excluding the owner) to carry workers’ compensation coverage,” Gottschlich said. “We don’t have any way of knowing just how many businesses don’t carry workers’ compensation, but it’s possible the 26 percent figure applies here, as well.”

Somers also said the gig economy has changed the mindset around insurance, and companies are buying policies for gig workers or their customers.

The workforce is also becoming more flexible and many workers are working in other states, employers need to be aware of their obligations in terms of insurance.

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