This is the second in a series of articles on helpful legal tips for how to avoid problems in your Georgia workers’ compensation claim. The first article and this article discuss things you can do before a work injury ever happens to make sure you are fully prepared.
Recently, an attorney in our firm spoke to a person about an injury on the job in Georgia. The person who was injured had owned his own business for years. The person had done the right thing and purchased workers’ compensation coverage. However, a couple of years before the injury at work, the individual had dissolved the company and was operating his business as a sole proprietor.
The reason this matters is because a sole proprietor is usually an employer, not an employee. As you can read in my first article in this series, Georgia workers’ compensation law usually only provided benefits for “employees” who are injured on the job. As a result, this person who suffered a clear work-related injury was not covered because, as a sole proprietor, he was an employer and not an employee.
In the same situation above, if the business had been incorporated and not dissolved, there would very likely have been coverage since corporate officers are considered employees as long as they do not choose to exempt themselves from workers’ compensation coverage. So, if you work as a sole proprietor, one of the ways that you can prepare for a work injury is to consider incorporating your business. There can certainly be other advantages or disadvantages to incorporating a business other than coverage under the Georgia Workers’ Compensation law so you should probably talk to an attorney who specializes in small business matters to consider all possible advantages and disadvantages before making such a decision.
It is also important to know that there are ways that an unincorporated sole proprietor can choose to be covered under Georgia workers’ compensation insurance but it requires jumping through a few legal hoops and must be done before a work injury ever occurs. Specifically, O.C.G.A. §34-9-2.2 currently provides, “Any sole proprietor or partner of a business whose employees are eligible for benefits under this chapter may elect to be included as an employee under the workers’ compensation insurance coverage of such business if he is actively engaged in the operation of the business and if the insurer is notified of his election to be so included.” However, before trying to elect coverage under this section, it is important to know that there are requirements for how the forms must be completed and filed; so it would be best to discuss this option, as well as the option of incorporating the business, with a Georgia attorney.