Sole Proprietor Workers’ Compensation Insurance for Small Businesses
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Does A Sole Proprietor Need Workers’ Compensation?
As a sole proprietor, you’re the CEO, the marketing department, and the front-line worker. A single injury doesn’t just mean a medical bill—it can mean your whole business stops.
In most states, sole proprietors might not be required to carry workers’ compensation, but it can provide critical coverage if a work-related injury or illness takes you out of action.
Here’s how workers’ compensation insurance for sole proprietors can help protect your bottom line:
Unlocking new projects: High-value clients and general contractors often require a Certificate of Insurance (COI) before you can step onto a job site. Carrying your own workers’ compensation policy makes you “hire-ready.”
Filling health insurance gaps: Most personal health plans explicitly exclude work-related injuries or illness. If you’re injured while on the clock, your provider may deny the claim, potentially leaving you to pay 100% of the medical bills out of pocket.
Replacing your paycheck: Unlike health insurance, workers’ compensation can help cover a portion of your income while you recover.
Simply Business gives you access to top insurance carriers.
What is Typically Covered by Sole Proprietor Workers’ Compensation Insurance?
A slip and fall on a job site. A bad reaction to chemicals at work. Even a bite from a client’s dog while working at their home.
Workers’ Compensation insurance for sole proprietors can cover a wide range of situations where you get hurt or become sick on the job:
Medical expenses
Workers’ Compensation for sole proprietors can cover medical exams, tests, and surgeries for workplace injuries and illness.
Rehabilitation costs
Benefits can help cover physical therapy and ongoing care to help you recover and return to work from a workplace injury or illness.
Lost wages
If you’re unable to work as the result of a workplace injury or illness, you could receive a portion of your average weekly wage, typically paid in weekly or bi-weekly installments.
Survivor benefits
In the event of the worst, sole proprietor workers’ Compensation insurance can help cover end-of-life expenses.
What is Typically Not Covered by Sole Proprietor Workers’ Compensation?
Workers’ compensation insurance for sole proprietors generally won’t help with:
Client or vendor accidents
Sole proprietor workers’ compensation insurance typically covers only you as the business owner. If a client or vendor is injured in the course of your normal work, they may be covered by general liability insurance, which we also recommend for small business owners.
Off-the-clock injuries
Injuries or illnesses that occur outside of scope-of-employment duties.
Impairment or misconduct
Injuries resulting directly from an employee’s intoxication, illegal drug use, or intentional willful misconduct.
Standard commutes
Routine travel to and from work, with limited exceptions such as traveling for a dedicated business errand.
How Much Does Sole Proprietor Workers’ Compensation Cost?
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What Some Customers are Paying for Sole Proprietor Workers’ Compensation2
Massachusetts
Electrician
- Limited Liability Company (LLC)
- 1 employee
- Quoted May 2026
$111
/month
Texas
Handyperson
- S-Corp
- 2 employees
- Quoted May 2026
$137
/month
Michigan
Lawn care
- Limited Liability Company (LLC)
- 2 employees
- Quoted May 2026
$95
/month
Learn more about workers compensation insurance cost here.
2These examples are real insurance quotes generated on the dates above. They are for illustration purposes only. Your coverage options and pricing may differ based on the information you provide us about your particular business, the state you operate in, the number of employees, and other factors.
Which Businesses Can be Covered by Sole Proprietor Workers’ Compensation Insurance?
Generally speaking, sole proprietor workers’ compensation coverage can be purchased for many types of businesses, even if they’re run by a sole proprietor. We can help find sole proprietor insurance for many different types of businesses, including these:
What Other Types of Insurance Do I Need?
Business insurance usually refers to one or more coverages suited to your type of small business. Here are the foundational insurance policies we most often recommend, and how they can help protect your small business:
General LiabilityFrom $20.75/month*
Professional LiabilityFrom $25.83/month*
Business Owner’s Policy From $33.75/month*
Inland MarineFrom $20.83/month*
Business Personal PropertyFrom $25.83/month*
Errors & OmissionsFrom $33.75/month*
Workers’ Compensation Laws for Sole Proprietors by State
Workers’ compensation laws vary widely from state to state. And for sole proprietors, that variation goes beyond whether you’re required to carry coverage.
Most states likely don’t require sole proprietors and independent contractors without employees to carry workers’ compensation. But some do — especially for higher-risk trades. It’s best to check your state’s specific rules and regulations.
Most states likely don’t require sole proprietors and independent contractors without employees to carry workers’ compensation. But some do — especially for higher-risk trades. It’s best to check your state’s specific rules and regulations.
In most states, sole proprietors can elect to be covered under their own workers’ compensation policy even when it’s not required but the rules for opting in, and the paperwork involved, differ from state to state.
For most small businesses, the simplest path is through a licensed broker like Simply Business, where you can compare workers’ compensation quotes from multiple carriers and find coverage that fits your state, industry, and payroll.
Four states — Ohio, Washington, North Dakota, and Wyoming — are monopolistic, meaning you can’t purchase a policy from a private insurer. Coverage has to come through the state-run fund.
Not having the proper coverage when required can come with steep fines and other penalties, so it’s best to check with your state agencies for specific information. We have the following guides to get you started:
California, Colorado, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Texas, Wisconsin.
How to Get Sole Proprietors Workers’ Compensation Insurance Online
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Answers to More Questions About Workers’ Compensation Insurance for Sole Proprietors
State Business Insurance Guides
Find out what’s required in the state or states where you operate:
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*The displayed price for each product is a monthly estimate calculated from the 10th percentile of relevant policies sold by Simply Business (e.g., General Liability data is used for General Liability estimates). This estimate uses data from relevant policy sales between July–December 2025. Final price and payment terms, which may include an initial down payment, are subject to change based on your state, selected insurance provider, and specific business details.