Is it legal that my employer self-insures instead of purchasing workers’ compensation insurance?

All employers who are subject to the Workers' Compensation Act are required to carry workers’ compensation insurance under Rhode Island law. However, it is possible for employers to pay for the costs of a work injury out of their own profits instead of purchasing workers’ compensation insurance (known as self-insuring). These employers must meet eligibility requirements and go through a certification process in order to legally provide benefits to injured workers. Employers who self-insure

Rules for Self-Insured Employers in Rhode Island

There are a few different ways an employer can offer its own workers’ compensation benefits, such as self-insuring by statute (applies to municipalities), or to become certified by the Department of Business Regulations as part of a self-insurance group. The most common way for businesses to self-insure is to be certified by the state Division of Workers' Compensation (DWC). The certification process takes approximately 60 days and requires:

  • Proof of financial guarantee. Every applicant for workers’ compensation self- insurance must be financially secure and must provide evidence of guarantee of coverage with minimum limits of several thousand dollars. Applicants may also be required to carry commercial stop-loss insurance during their first five years of self- insurance to ensure all employee claims will be paid.
  • DWC investigation. A DWC investigation may include employer site inspections, feasibility studies, financial obligation requirements, records from a parent guarantor; bonding and payment facilities, and other requests necessary to satisfy the DWC that the employer is eligible for approval or re-certification.
  • An administrative hearing. Initial approval will only be granted after a hearing before the Director of the Department of Labor & Training to review the results of the DWC investigation.
  • Adherence to workers’ compensation rules and regulations. Self-insured employers are still required to comply with all requirements of workers’ compensation laws, including data processing regulations, workers’ compensation procedures, and the rules and orders of the Workers’ Compensation Court.
  • Commitment to payment and reporting standards. Employers are responsible for paying application fees and yearly assessments to the RI Workers’ Compensation Fund, submitting payroll records and other documents to the DWC in a timely fashion, and renewing certification every year to prevent lapses, revocation, or expiration.

If you need help accessing your workers’ compensation benefits, simply fill out the online contact form on this page, or call Kirshenbaum & Kirshenbaum to set up a consultation with our work injury attorneys.