Think You Don’t Need Workers Compensation? Think Again.

work campers

Even though some states do not require you to carry workers compensation insurance, you might still be responsible to pay if one of your employees is injured on the job.

Some states require workers compensation insurance if you have a minimum of three to five employees, while other states, such as California, require workers compensation even if you have only one employee. ALL states agree that even if you aren’t required to carry workers compensation insurance, you ARE required to pay for medical and disability expenses incurred by any “employees” who are injured while working for you. If there is disagreement on the issue, a determination is made by the Department of Labor in your state AFTER the injury has occurred.

Work Campers

The area where we have seen the most disagreement on this is “work campers.” Many park owners feel that work campers are independent contractors because they get 1099’s instead of W-2’s. This does NOT matter. What matters is whether they do this type of work for anyone else (like a contractor who has their own insurance, vehicle, and tools), and the issue of “control” where the employer tells them how and when to do their job.

We recently had an interesting call from a client who had a worker who had been injured. This worker was volunteering at the park and was a resident there. The worker had volunteered in the past to do the same job. The park owner didn’t feel good about letting him volunteer, so he offered to pay the person $10/hour for the few hours he had worked. The gentleman asked if they wanted help the next time, and the owner agreed.

Is the worker an employee, an independent contractor, or a volunteer?

Using the process of elimination:

  • If he was an independent contractor, he would have to provide proof of insurance showing he has commercial liability insurance and workers compensation. You would also keep an updated certificate of insurance on file for all contractors that come onto your property. Do you think this was the case? No, it was not.
  • Next is he a volunteer? If you pay a worker with anything, even doughnuts and coffee, they are technically not a volunteer. Giving cash, a free RV site for the night, or something else in trade is also considered compensation, meaning this worker is not a volunteer.
  • So, what is left? Bingo! He is an employee.

How would anyone know if he was working for you or if he was getting paid? Let me ask you this: When was the last time you were injured and had to go to the doctor or emergency room/urgent care? In the first five minutes you will be asked a myriad of questions. “What happened? Where did you get hurt? Were you at work?” Medical providers know to ask and will continue to ask if the injured person was hurt at work. They want to ensure they get paid for treating the patient. If it is a workers compensation claim, there is no deductible they have to worry about and payment is assured. When your “volunteer” is in pain and know they don’t have coverage, what do you think they are going to say? You know it. I WAS WORKING FOR THE XYZ RV PARK.

Now the medical provider knows they can come to you to get paid, right? Oh wait, you aren’t required to have workers compensation because you are in a state that doesn’t require it unless you have five or more employees. Or you don’t have it because you think the worker is an independent contractor. If you fall under one of these scenarios, you might think the Department of Labor will pass you by and not expect you to pay. Think again. The state might have just given you enough leeway to hurt your business in the long run.

Workers Compensation vs. Penalties and Medical Expenses

Most parks with one to five employees can purchase a policy for around $500 to $2,000 per year. Compare this to the cost if an employee is injured and you are left paying medical bills, or worse, if your state assesses a fee or penalty (could be as high as a $300,000 fine and three years in jail). While some injuries may not seem like a big deal cost wise, others could add up and quickly exceed the cost of workers compensation insurance. Some examples we have seen:

  • An employee was hit by a car in a campground. Resulting medical claim: $50,000.
  • An employee stabbed a screwdriver through her hand. Resulting medical claim: $20,000.
  • A “contractor” fell off the roof on the first day of a roofing job. Resulting medical claim: $22,000.

No matter how small your business is, we urge you to consider getting workers compensation. Being a small business might be even more of a reason to have this insurance. You may not have deep pockets to pay medical bills or a legal department to handle this type of issue. You might want to take your lawyer out for coffee and ask their opinion on whether your work campers are employees and whether you should have workers compensation on them.

Another employee to keep in mind is yourself, the park owner. Are you excluding yourself because you have health insurance? Watch for a future article on why you, as a park owner, should consider covering yourself under workers compensation as well.

Because we see these issues on a daily basis, we hope you’ll consider how this affects your business. We’d be happy to meet with you to discuss further. Our goal is to help protect your business and assets that you have worked so hard to build.

For state-by-state comparisons of workers compensations requirements, visit:

Damian Petty specializes in insurance for the recreation and hospitality industry. His top priorities include being involved in his clients' industry, getting to know their businesses, and helping them understand their insurance options so they can make sound risk management choices.