Corporate officers are considered employees of the corporation and the corporation is subject to the Wisconsin Workers Compensation Act. However, if a closely held corporation has no more than two (2) corporate officers and has no other employees, a workers compensation policy is not required if both officers elect not to be subject to the Workers Compensation Act.
To elect not to be subject to the Workers Compensation Act, a Corporate Officer Option Notice must be completed and filed with the Workers Compensation Division. Officers who exclude themselves will still be counted in determining whether the employer is subject to the Workers Compensation Act under section 102.04(1)(b) of the Wisconsin Statutes.
Definition of "closely held corporation: A closely held corporation is defined as a corporation with not more than 10 stockholders.
A corporation with more than two (2) corporate officers or any other employees is not eligible to file a Corporate Officer Option Notice and must obtain and/or maintain a workers compensation insurance policy. All workers compensation policies covering corporations include corporate officers, however, a closely held corporation may exclude up to two (2) corporate officers from coverage on their policy. The exclusion must be made by an endorsement on the workers compensation policy and must include the name(s) of the officer(s). The exclusion will remain in effect for the policy period. Contact your insurance agent or insurance company regarding this policy endorsement.
A qualified corporation must either file a Corporate Officer Option Notice or obtain/maintain a workers compensation insurance policy or the corporation will be considered uninsured and in violation of the Wisconsin Workers Compensation Act.
The penalty for failure to carry workers compensation insurance when required is twice the amount of premium not paid during the uninsured time period or $750, whichever is greater. Under certain circumstances, an employer who has a lapse in workers compensation insurance coverage can be subject to a penalty of $100 for each day they are uninsured up to 7 days.
A closely held corporation having no more than two corporate officers and no other employees may elect not to be subject to the Wisconsin Workers Compensation Act by completing the Corporate Officer Option Notice and returning it to the Wisconsin Workers Compensation Division, Bureau of Insurance Programs, P.O. Box 7901, Madison, WI 53707-7901.