Workers’ Compensation Guide for Subcontractors

  • Published Nov 17, 2020

Subcontractors often handle many different things at once. From taking on multiple projects to managing the many unique facets of your own business, it’s likely that the last thing you want to do at the end of the day is think about commercial insurance. Despite workers’ comp insurance being beneficial for subcontractors like you, it can be confusing. This is particularly because you often work on a variety of jobs with a variety of employers — who may all have different regulations regarding workers’ comp insurance.

Below, we’ll go over common questions related to workers’ comp insurance for subcontractors.

Do Subcontractors Need Workers’ Compensation Insurance?

When it comes to workers’ comp insurance for subcontractors, the answer depends on a few different factors, including the types of clients you work for and the amount of protection you’d like to have for yourself. Legally, most states don’t require subcontractors to carry their own workers’ compensation policy; however, some subcontractors find comfort in knowing that they are covered in the event of an on-the-job injury — especially those who own their own business.

Moreover, many clients require subcontractors to carry workers’ comp coverage before they will hire them for a job. This is common particularly in industries like construction, where the general risk for injuries on the job is high. Clients may request proof of a personal workers’ compensation policy before they hire you, in order to protect their business against liability for expenses if you are injured while completing their project.

Why Would a Subcontractor Need Workers’ Comp? 

It’s not uncommon for subcontractors to believe they do not need workers’ compensation insurance, but potential employers often require it for a few reasons.

  • When subcontractors have their own workers’ comp policies, their employers’ insurance rates are not affected by that subcontractor’s payroll or claims at the end of the year.
  • By requiring subcontractors to have their own workers’ comp insurance, employers are not held responsible for medical expenses, lost wages, legal fees, and other costly expenses associated with an on-the-job injury or illness.
  • Having subcontractors with their own coverage allows businesses to complete their project and know they are protected, all at a lower cost than would be the case if they hired their own full-time employees and had to provide workers’ comp coverage and other employee benefits.

In addition, workers’ comp for subcontractors helps protect you, your livelihood, and your business. When it comes to whether or not it’s worth it to invest in workers’ comp, there are a few important things to re.

  • Most workers’ comp policies for subcontractors are inexpensive, making them affordable even for those just starting out.
  • Having workers’ comp coverage makes getting hired for jobs easier because you can provide your proof of insurance quickly and easily to employers that require it.
  • Can you financially handle being out of work for weeks or months? Can you afford an emergency room visit and ongoing medical bills for a serious injury? If the answer to these questions is no, then workers’ comp is a must for your subcontractor business. Workers’ compensation insurance covers the cost of short- and long-term medical expenses, lost wages, legal fees, and other expenses in the event that you are injured or fall ill while on the job.

How Much Does Workers’ Comp Insurance for Subcontractors Cost?

The cost of workers’ compensation insurance is based on a few factors unique to you and your business. These factors include the industry you operate in, your workers’ compensation claim history, and the state in which you do business. Luckily, many subcontractors find that coverage is much more affordable than they expected.

Cerity — Here for Small Businesses

At Cerity, we understand that subcontractors do a lot — from taking on big projects to managing their own businesses. That’s why we’re here to help streamline the complex world of commercial insurance.

We offer workers’ comp insurance for subcontractors in a faster, more affordable, and more flexible way. With our innovative online workers’ comp quote tool, we can provide quick, comprehensive workers’ comp coverage so you can focus your attention on running your business. To get a free quote online, visit our workers’ comp quote tool.

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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.