Workers’ Compensation for Independent Contractors

Please note if you are a contractor who works in construction, home remodeling, or roofing, we don’t cover these industries at this time. 

When you’re an independent contractor, you never know where your work will take you. Travel to job sites, shifting work environments, and an array of clients all keep you on your toes. Variety is one reason diving into the gig economy appeals to many professionals, but there is also risk in going solo. Since the success of your business depends solely on you, an injury on the job could have devastating results for your future. Workers’ compensation protects independent contractors so they aren’t sunk by medical bills and loss of income that can result from getting hurt on an assignment.

Most states require businesses to carry workers’ compensation insurance. Small businesses can learn more about their responsibilities and options for workers’ compensation here. However, it is important to note that independent contractors may not be considered employees and are therefore not covered by the workers’ compensation insurance of the contracting business. If you have an accident at the business site or while performing contract work, you may be responsible for covering your medical costs and caught without a safety net while you recover.

Though states generally do not require self-employed independent contractors to have workers’ comp insurance, there are other reasons to have coverage. Some businesses expect independent contractors to carry their own workers’ compensation insurance and request a Certificate of Insurance as part of the work contract. If your business grows and you bring in subcontractors or other employees, having workers’ comp insurance already in place allows for a smooth transition.

Independent Contractor Injuries

Independent contractors are just as likely to get injured on the job as full-time employees. Being unaccustomed to office layouts, traveling on assignment, or working remotely on a laptop for an extended period are just a few examples of risks to independent contractors. And depending on the particular industry in which you work, there may be other health or safety concerns.

Independent contractor insurance helps protect you financially should you be injured while performing contract work by covering costs related to the injury. While individual health insurance plans may partially cover medical costs, high deductibles may not provide much remedy for the financial burden. Most independent contractors do not have a disability insurance policy, and even if they do, it may not match their cash flow needs during recovery. Having workers’ compensation gives you peace of mind so you can focus on the jobs you are contracted to do. Most workers’ compensation insurance plans pay for your:

  • Ambulance and emergency room care
  • Ongoing medical costs (medication, physical therapy, etc.)
  • Partial lost wages for recovery time

As an independent contractor, workers’ compensation insurance not only protects you if you are injured, but also can protect you from costly lawsuits if a subcontractor has an accident on the job.

Business Insurance for Independent Contractors

When you are self-employed it is important to determine the insurance that you need to provide your services responsibly. Your state’s labor department will have valuable information about the roles and responsibilities of independent contractors. This information can help you decide the type of professional insurance to purchase. Independent contractors and other self-employed professionals like consultantsaccountantslawyerstherapists, personal trainers, pet sitters, event planners, and photographers can all benefit from knowing their options when it comes to workers’ compensation.

In the past, independent contractors and other self-employed professionals had limited commercial insurance options. However, with more professionals moving into solopreneurship, the marketplace has adapted to meet business insurance needs for companies of all sizes.

Cost of Workers’ Comp Insurance

The cost of workers’ compensation insurance depends on a variety of factors. Your premium, or the cost of your insurance, is determined based on the type of work that you contract, the state where you’re located, and details specific to your business, such as your history of workplace accidents and whether you subcontract work to other parties.

Regardless of the cost of workers’ compensation insurance premiums, the value of having coverage is unparalleled in the event of an incident.

At Cerity, a faster and more affordable workers’ comp insurance provider, we can evaluate your specific needs and provide an immediate quote using intelligent pricing. Using proprietary tools and modern technology, we provide policy options that can begin immediately, taking the stress and worry out of finding workers’ comp insurance. To get a free quote online, visit our workers’ comp quote tool.

Please note if you are a contractor who works in construction, home remodeling, or roofing, we don’t cover these industries at this time.

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The information provided is intended to provide a general overview. This information is not legal advice and should not be relied on as such. Cerity® makes no warranties for the accuracy, adequacy, or completeness of the information provided, and will not be responsible for any actions taken based on the information contained herein. If you have legal questions or need legal advice, please consult an attorney.