If you’re an independent contractor, you are probably not legally required to have workers’ compensation insurance coverage. However, there are situations in which you may still need (or want) to have workers’ compensation insurance.
You may need workers’ compensation insurance if a business you work with requires it
If you work as an independent contractor for another company, you won’t be covered under their workers’ compensation insurance policy. Therefore, if you’re injured on the job, you won’t receive workers’ compensation benefits like their employees do. In other words, if you are injured on the job, you wouldn’t get any payments for medical bills, lost wages, or rehabilitation services.
In many cases, if you don’t have your own workers’ compensation insurance, other companies can’t afford the liability of having you perform contract work for them. They will typically ask you to show proof that you’re covered—in the form of a workers’ compensation certificate of insurance. Some companies, especially those in the construction industry, won’t even think of signing a contract with you until you show them your proof of insurance.
You may decide you want the protection workers’ compensation insurance offers
If you don’t have the protection of workers’ compensation insurance and are injured as a result of your work, your medical expenses—for emergency room visits, doctors’ appointments, diagnostic procedures, surgeries, physical therapy, prescription medications, and other treatments—can pile up quickly. You may also lose time and money while you’re recovering. A serious work-related injury can even put you out of business. That said, even if you’re not required to have a workers’ compensation policy by another company or by law, you might want to get this valuable type of coverage anyways.
How to get workers’ compensation insurance as an independent contractor
Not all insurance providers cover independent contractors. Your best bet is to start with an insurance company that caters to small businesses. Follow these three steps to begin finding the best workers’ compensation insurance company that fits your needs:
Whether you call yourself an independent contractor, freelancer, “solopreneur,” or subcontractor—and whether you have structured your business as a sole proprietorship, single-member LLC, or S-corp—workers’ comp insurance can help shelter you from an unpredictable storm. There’s nothing quite like having the security of knowing you have a safety net that can help with medical bills, lost wages, vocational rehabilitation, and even death benefits in case of an emergency.
Thanks for reading! Please note that this content is intended for educational purposes only. As laws change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about workers’ compensation insurance or check your current rate in 3 minutes.