Why Do I Need Workers Compensation Coverage?

 In Business, Insurance

By: Larry Andrick | AmeriProtect & Mourer Foster Insurance Agency

When speaking to MAC members regarding AmeriProtect, the MAC’s wholly owned subsidiary offering business and personal insurance options, I often get the question: “Why do I need workers’ compensation coverage anyway?” The answer is simple – it’s Michigan law.

Section 418.641 of the Michigan Workers’ Disability Compensation Act prescribes the penalties for an employer not covering their employees with a workers’ compensation policy:

Sec. 641(1) An employer who fails to comply with the provisions of section 611 is guilty of a misdemeanor and may be fined not more than 1,000.00, or imprisoned for not more than 6 months, or both. EACH DAY’S FAILURE IS A SEPARATE OFFENSE [Emphasis added.].

For this reason, practically every business entity in Michigan needs to purchase a workers’ compensation policy. The Michigan Workers’ Compensation Agency keeps very accurate records and tracks compliance with this law, including effective and expiration dates of workers’ compensation policies across the state.

What About Independent Contractors?

Unfortunately, some employers have attempted to evade the requirement to purchase workers’ compensation insurance by classifying their employees as “independent contractors.” However, unless the “contractor” holds him- or herself out for hire by other businesses, as well as controls their hours and whether they can accept the job that is offered, the agency will enforce the belief that they are in fact employees, and are thus subject to workers’ compensation, unemployment insurance, FICA, etc. Federally, the IRS has been quite active in tracking down employers who attempt to evade the employee designation and label workers as independent contractors, so before doing so, be fully aware of the legal ramifications and potential pitfalls.

Michigan’s Workers’ Compensation Act

The Michigan Worker’s Disability Compensation Act was enacted by the legislature in 1912 to provide employees injured on the job with medical and wage loss benefits on a no-fault basis.  Prior to the Act, employees injured on the job would have to sue their employer under the tort system for any lost wages and medical costs due to the injury. This process could take years to settle in the court system. Thus, the move to the benefit provisions of the Worker’s Disability Compensation Act.

The MAC is providing this information to help you understand the law. If you have any questions or concerns – or would like information on workers’ compensation or any other insurance offering through AmeriProtect – please feel free to use the contact information below or go to www.ameriprotect.us. Our goal is to create a chiropractic association-owned and run insurance company that benefits the profession, delivered to MAC members at the lowest possible cost.

Larry Andrick has been with Mourer Foster, the MAC and AmeriProtect’s partner for chiropractic workers’ compensation and business owners’ liability insurance programs, since 1994. His specialty is workers’ compensation for employers and associations. He can be reached by phone at (517) 346-5212 or by email at landrick@mourerfoster.com.


What is AmeriProtect?

Who owns and operates AmeriProtect?

AmeriProtect, located in Lansing, Michigan, is owned by the Michigan Association of Chiropractors (MAC) and its operations run out of the MAC headquarters. It is governed by its own Board of Trustees, all MAC members, who oversee the growth and transparency of the group.

Where do the profits go?

In short, all profits stay in the profession. Sure, there are overhead costs, but the mission of AmeriProtect is to provide quality, affordable insurance products to Michigan chiropractors, while keeping their hard-earned financial resources in the chiropractic profession.

How does AmeriProtect benefit the chiropractic profession?

Normally, when chiropractors purchase their health and workers’ compensation from other carriers, that money spent is NEVER returned to the profession. In fact, some carriers actively lobby against chiropractors at the capital. Here is a quote from a senior Blue Cross official testifying against Michigan Senate Bill 282 (which would require workers’ compensation to pay for all chiropractic services legally performed under our scope of practice):

“This bill expands reimbursement for chiropractic care into the primary care arena, which we believe jeopardizes patient safety and exposes injured workers to the risk of misdiagnosis and unnecessary care. A worker’s health and safety is our foremost concern whether it is on the job site or in the exam room. By not interacting with a primary care doctor, the patient risks a delay in receiving appropriate care.”

In short, the money most chiropractors are spending on health and workers’ compensation coverages is funding opposition activities. AmeriProtect wants to help stop that process.

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