Do I need workers' comp insurance?

Most states require employers to carry workers' compensation insurance. Workers' comp covers employee injuries or illnesses that happen on the job. It can pay for medical expenses, lost wages, and rehabilitation.

Having coverage complies with the law. It can also help you avoid costly out-of-pocket expenses if your employees experience work-related accidents.

When is workers' comp required?

Every state has workers' comp requirements, but the laws vary based on your number of employees and type of work. For example, businesses in California must insure all employees, while those in Tennessee need insurance only if they have five or more employees. Browse business insurance by state to understand workers' compensation and other coverages where you live.

Even if you're exempt from carrying workers' comp by law, some clients might require it. Review your business contracts to make sure you have adequate coverage before starting work.

Do I need workers' comp insurance for myself?

Self-employed individuals aren't typically required to have workers' comp insurance. However, if you're a sole proprietor or independent contractor, workers' comp is worth considering because it can protect your income and assets in case of work-related injuries or illnesses.

You may be depending on your health insurance for injury coverage, but some policies won't cover accidents that happen on the job. Your health insurance also won’t cover lost wages if you are unable to work. Learn more about workers' comp insurance for self-employed individuals and independent contractors.

Do I need workers' comp insurance for 1099 employees?

You may need to provide workers' compensation insurance for 1099 employees and independent contractors, but state laws differ. In some states, every person who performs work on your behalf must have workers' comp coverage, even if they are independent contractors or 1099 employees.

Company policies and contracts can also determine the need for workers' comp. For example, clients may require you to cover any 1099 employees who work directly with them. This insurance helps your customers and business maintain industry standards.

How much workers' compensation insurance do I need?

The amount of workers' comp coverage you need depends on your payroll, number of employees, and industry. Higher-risk professions usually require more coverage. For instance, manufacturers typically need more workers' comp insurance than accounting firms due to higher day-to-day safety risks.

Your coverage amount also affects what you'll pay for workers' comp. Insurers may consider other factors like employee training programs and workplace safety standards. Safety training and protocols may even help reduce your workers' comp premium. Learn more about workers' comp costs.

Why should I get workers' comp if it's not required?

Business owners should consider workers' comp because it provides important protections to your company and employees. It typically prevents your business from being sued after a workplace accident and helps if you do get involved in a lawsuit. It also connects injured employees with financial and medical support.

Workers' comp can also benefit your business's reputation. It demonstrates responsibility and shows that you care about your employees' wellbeing. It signals a commitment to safety that clients and workers both value.

Need workers' comp insurance? Get a quote today

Speak to one of our business insurance experts to determine whether you need workers’ compensation insurance. We can help you evaluate state requirements and find the coverage you need to protect your business.

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