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Business owners, entrepreneurs, and independent contractors who suffer a work-related injury or illness have workers’ compensation insurance to cover their medical bills and lost wages. It is recommended that self-employed people purchase workers’ comp coverage so that their business is protected in case they are unable to work because of work injuries.

You never know where your work will take you as an independent contractor. Travel to different sites, changing work environments, and a variety of clients keep you on your toes. An injury on the job could have devastating consequences for your business since its success depends solely on you. Workers’ compensation provides coverage for independent contractors, so they won’t have to worry about getting hit by medical bills and lost income if they are injured on the job.

Even though most states require businesses to carry workers’ compensation insurance, independent contractors are not considered employees, so they are not covered by the company’s workers’ compensation insurance.

During contract work or while at your business site, you may be responsible for covering the medical costs of an accident. Moreover, recovery may be difficult without a safety net.

Although many states do not require independent contractors to carry workers’ compensation insurance, it is still helpful to have. Workers’ compensation insurance is sometimes expected from independent contractors, and businesses may ask for a Certificate of Insurance as part of the work contract. When your business grows and you bring on subcontractors or other employees, having workers’ compensation insurance already in place can ease the transition.

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).    

PEOPAYGO Offers Free Quotes For Workers' Comp

Businesses and self-employed contractors might want to consider getting a policy that protects their business if they get hurt at work instead of skipping workers’ compensation protection. As a leading small business insurer, PEOPayGo is a great option.

As a Professional Employee Organization (PEO), P.E.O.PayGo can help you get workers comp, bundle payroll, HR, and perform all the headache functions of a small business, all while saving your time and money. Let our Instaquote do all the work, we don’t need much information and it takes 2 minutes. Our software does all the work for you. 

Get Ready, Set, and Covered Now!

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