Do I Need Workers’ Comp Insurance If I’m Self-Employed?

Most employers will need to carry insurance to cover their employees in case of a work-related injury or illness. In fact, in every state except Texas, it is mandated by law.

While it’s easy to see why employers need to cover their employees, one may wonder if self-employed individuals need the same coverage. The answer is, it’s not mandatory, but it’s a good idea.

Workers’ Comp for the Self-Employed

Workers’ comp benefits self-employed individuals and solopreneurs by offering them medical help when they fall ill or are injured during the course of their work-related duties.

It also comes in handy whenever there is a need to protect your business and ensure its survival when you can no longer create an income.

Independent business owners are not obligated to get workers’ comp insurance. However, the benefits of having a policy should motivate you to consider getting one. These include:

  • Operating in highly risky work environments. If your business is considered high risk, the chances of getting injured in the line of duty are high. You can protect yourself against unexpected expenses that result from medical bills by having insurance.
  • Legal obligation. You need to understand the laws in your region. In some cases, some states will require sole proprietors to have workers’ comp insurance. You need to comply with these guidelines to operate lawfully in your area.
  • When insurance is part of the contract requirements. Some partners will only agree to work with you if you have workers’ comp insurance, regardless of whether you have employees or not.

Choosing the Right Workers’ Comp Insurance

Investigate the market to find the perfect solution for your needs. There is no one plan that works for all situations. You may have to compare a few different providers to know which one suits you and your business best.

Cost of Solo Entrepreneurs Workers Comp Insurance

The cost of self-employed workers comp insurance depends on the state one is from. More often than not, it is also influenced and calculated based on payroll status, history of claims, and job classifications.

Don’t automatically choose the plan that is the least expensive, because it might not have the kind of coverage that is right for you. Understand what the rates are in your region and choose the most affordable plan that will meet your needs.

Opting Out of Self-Employed Workers’ Comp Insurance

This type of insurance is not mandatory in most cases, but it may improve your business situation. However, if you already have coverage and you want to opt-out, there are ways to go about it.

Entrepreneurs can apply for a waiver to be exempted if it is a mandatory state requirement. This may require you to file a lot of paperwork with your local state board.

How Workers’ Comp Insurance Differs From Health Insurance

Many self-employed entrepreneurs assume that their health coverage will help whenever they fall ill or get injured while working. Unfortunately, that is not how it works. The majority of the health insurers will not pay for injuries and illnesses caused by work-related situations.

In the rare event that they do, this will still not be enough, especially considering that health insurance is expensive and you could lose it if you are unable to work.

In some circumstances, you may be injured or become ill during the course of your work duties but it is the fault of another party. An example of this would be being hit by a negligent driver while you are making a delivery.

If you have been a victim of any type of personal injury, Laborde Earles might help you.

Workers’ compensation insurance is a great option, but it’s not the only option in every situation. Speaking to an attorney is the best way to learn about your rights and to determine the best way to seek compensation.