As a result of its prevalence in American history, it’s not surprising that most states require employers to carry self employed workers comp insurance, even for small businesses. This type of policy protects both the self-employed individual and anyone they may hire.
If you’re unable to work due to a work-related injury, self employed workers comp can provide crucial benefits during recovery. It also protects your business from legal action in the event of a workplace accident. While you’re not required to carry a policy if you’re a sole proprietor or in a partnership with no employees, it’s still a smart safeguard.
Once you hire anyone, even casually, you become liable for anything that happens to them on the job.
Workers' Comp for Self-Employed
As with full-time employees, independent contractors are also prone to injury on the job. You may also have to consider other safety or health concerns based on the industry you work in.
Independent contractor insurance protects you financially in the event that you are injured while performing contract work.
Workers’ compensation insurance protects independent contractors not only if they’re injured on the job, but can also help keep them out of financial ruin if a subcontractor is injured.
When you have workers’ compensation, you can focus on the jobs for which you are contracted.
Generally, workers’ compensation plans cover the following:
-Ambulance and emergency room services
-Medical costs (medication, physical therapy, etc.)
-Partially lost wages during recovery
Does Self-Employed Require Workers' Comp?
Generally, state law requires employers to obtain workers’ compensation for their employees, but coverage is usually optional for independent contractors and self-employed individuals.
Solopreneurs should look into workers’ compensation in the following situations:
-Some people face a higher risk of workplace injuries if they work in a high-risk industry. There are a few situations in which a self-employed person may need workers’ compensation. These include repetitive movements, exposure to chemicals, and manual labor.
-Self-employment insurance coverage isn’t optional in every state. Roofing contractors in California, for example, are required to have workers’ compensation policies, regardless of whether they employ workers.
-In addition to meeting contract obligations, independent contractors may find other businesses only want to hire them if they have workers’ compensation coverage. This is because it limits the other business’ liability in the event the independent contractor is injured while working for them.
You should keep in mind, that workers’ compensation is needed by most employers. In the event you hire staff, even if you’re exempt, you’re responsible for getting them coverage.
A Sole Proprietor Should Also Consider This Insurance Policy
In addition to workers’ comp, business owners often purchase general liability insurance.
This is the most important business insurance purchase.
It’s also called slip-and-fall insurance because it covers medical costs if someone gets hurt at your store or office.
General liability covers you whether it’s someone else or your employee who gets hurt or their property is damaged through your work.
What Do You Need To File For Workers' Comp If You're Self-Employed?
When it comes to filing a workers’ compensation claim, timing is crucial.
Once you have sustained a work-related injury or illness, you have a limited amount of time to file your claim.
If you miss the deadline, your insurance company may reject your claim.
Contact your insurance company to ensure you have the necessary forms and contact information at hand to report and document the incident.
The provider will send you payment details if they approve your claim. If the claim is denied, you may request a reconsideration or file an appeal (usually through your state’s workers’ compensation board or commission).
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