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Nevada Workers’ Comp: Are You Paying for “Ghost” Coverage?

Nevada Workers’ Comp: Are You Paying for “Ghost” Coverage?

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Nevada Workers’ Comp Officer Exemption: Mandatory Inclusion and the Exclusion Filing

Quick Takeaways

  • The Default: Nevada corporate officers are included in mandatory workers’ comp coverage by default. Premium is owed on the officer’s wages until a formal exclusion is filed and approved.
  • The Rule: Nevada law includes executive officers automatically unless they meet the state’s ownership threshold — typically 10% or more — and file a “Notice of Election to be Excluded” with the carrier.
  • The Fix: Review officer status at every renewal. Passive officers who are paying premium without any real exposure to workplace injury should file the exclusion. Active officers should weigh the premium cost against a private disability policy before electing out.

In Nevada, corporate officers are employees for workers’ comp purposes unless they have filed an approved exclusion. The carrier does not automatically apply an exemption based on ownership percentage. An officer who assumes their ownership stake exempts them from coverage — without filing the formal election — is both unprotected if injured and exposed to retroactive premium assessments for the years they went without filing.

The Inclusion Default

Nevada law treats officers as workers subject to mandatory coverage. Premium is calculated on the officer’s wages up to the state-set maximum, and that obligation runs from the start of the policy period until either an approved exclusion is on file or the officer ceases to be an officer of the corporation.

For passive owners who rarely or never perform physical work on job sites, inclusion can produce a premium cost with no corresponding exposure benefit. For these officers, the exclusion is often appropriate — provided they understand that an excluded officer has no workers’ comp coverage if they are injured in a work-related capacity.

The Exclusion Filing Process

The exclusion requires filing an Application for Exclusion (Notice of Election to be Excluded) with the carrier. The officer must demonstrate that they meet the ownership threshold — typically 10% or more of the corporation’s stock. The exclusion is not retroactive; it takes effect from the date it is approved, not the date the officer first assumed ownership.

Active officers — those who work alongside employees, visit job sites, or perform manual tasks — should evaluate the exclusion carefully. An excluded officer who is injured in a work-related context has no workers’ comp medical or wage replacement coverage. The gap between an excluded officer’s exposure and a private disability policy’s coverage terms can produce a significant financial problem during recovery from a serious injury.

Case Example: Las Vegas Construction Owner

A construction company owner in Las Vegas owned 100% of his company and had not filed an exclusion, assuming full ownership created an automatic exemption. While working with a crew on a project, he sustained a severe knee injury. Because no exclusion was on file, the carrier covered the claim — and then assessed retroactive premium for the three prior years, calculated on his six-figure salary. The coverage was provided, but the retroactive premium assessment eliminated three years of profit margin. The assumption of automatic exemption cost more than the premium would have.

Frequently Asked Questions

Does the 10% ownership threshold apply to all officer types?

The threshold applies to officers of corporations. The rules for LLCs and other entity types may differ. Confirm the applicable ownership and filing requirements with the carrier at each renewal, particularly if the ownership structure has changed during the year.

Does the exclusion need to be refiled each policy year?

The exclusion typically carries forward as long as the officer’s ownership status and role remain unchanged. However, the exclusion should be confirmed with the carrier at every renewal to ensure the filing is still on record and no circumstances have changed that would affect its validity.

Can an excluded officer elect to re-enter coverage?

Yes. An officer who has elected out of coverage can file to re-enter. The re-entry is prospective — it does not cover injuries that occurred during the exclusion period. An officer returning to active field operations after a period of passive ownership should re-enter coverage before resuming hands-on work.

Confirm Officer Exclusion Status at Every Nevada Renewal

At every Nevada renewal, identify all corporate officers and confirm whether each holds an active exclusion. For officers whose circumstances have changed — increased active involvement in operations, change in ownership percentage, addition of new officers — review whether the current election still makes sense. For officers who are included by default and want to reduce premium, initiate the exclusion filing before the new policy period begins. A retroactive exclusion is not available once the policy period is underway.

Agents who help Nevada employers manage officer exclusion filings can find resources at WorkCompProfessionals.com. Employers who want to review their Nevada officer coverage status can start at ConquerCompCosts.com.