Massachusetts Worker’s Compensation Coverage Now Available for Members of Limited Liability Companies (LLC)

The State of Massachusetts has recently clarified its position regarding the availability of Workers’ Compensation Coverage for Members of Limited Liability Companies. You may recall the October 2002 notification we sent when Massachusetts passed legislation which allowed sole proprietors and partners to elect Workers’ Compensation coverage for themselves. The Massachusetts Department of Industrial Accidents (DIA) at that time said, in spite of that change, coverage for the members of Limited Liability Companies was still excluded and they were not able to elect coverage.

The DIA has now recently issued an advisory ruling, which states it is the policy and practice of the DIA to consider LLCs legal partnerships. As such, the members of LLCs, at their election, may obtain a workers’ compensation policy (or amend an existing policy) to provide coverage and benefits for said members.

As mentioned in our original notice, if sole proprietors or partners, and now LLC members, wish to be covered as employees under a Workers’ Compensation insurance policy, they must submit a written request to the carrier. The election must be reaffirmed annually prior to the renewal date.

As always, an LLC must secure a Workers’ Compensation insurance policy to cover its employees, but unless the members of the LLC specifically elect coverage for themselves in writing, they will not be covered by that policy.

If you are a member of an LLC and wish to elect Workers’ Compensation coverage for yourself, please be sure to let us know right away. Please contact us if you have any questions.