Sole Proprietors Workers’ Compensation

Protect Yourself and Your Business with Sole Proprietorship Workers’ Comp

Get covered for medical payments, rehab costs, lost wages, and more.

HVAC tech working on an AC unit

What is Sole Proprietor Workers’ Compensation?

This type of sole proprietor insurance can cover you as the owner of a business if you get sick or injured on the job from work-related activities or exposure.

What Does Sole Proprietorship Workers’ Comp Cover?

Depending on the type of policy, you can receive the same benefits that one of your employees would receive under a traditional workers’ comp policy.

These often include:

Coverage for medical payments.

As mentioned above, your workers’ comp policy may help pay medical bills and help provide you with extra peace of mind.

Rehabilitation expenses.

Some work-related injuries take more than just immediate medical care. Rehabilitation and therapy also may be required. If so, your workers’ comp policy could cover those costs, as well.

Lost wages.

Recovering from a work-related illness or injury also could keep you out of work. If you’re a sole proprietor, that could be a big financial hit. Workers’ compensation can often make up some of your lost income while you recover.

Death benefits.

While not a pleasant thought, if you die as a result of a workplace injury or illness, your workers’ comp policy can cover funeral costs and financial assistance for your family.

Some things not covered by workers’ compensation are:

  • Client or vendor accidents
  • OSHA fines
  • Work safety improvements
  • Wages for a worker replacing an injured employee
Man operating small backhoe

Why should I have sole proprietor workers’ compensation Insurance?

While it may not be required by law in your state, you may need sole proprietor workers’ compensation insurance to land jobs in certain higher-risk fields, such as construction or roofing — even if you run a business that doesn’t have employees.

Your health insurance may not be enough.

A standard health insurance plan may not cover you for work-related illness or injury, and you may have to pay for medical expenses out-of-pocket. Plus, many health insurance plans won’t cover lost income as a result of your injury or rehabilitation and retraining costs.

Man powerwashing a deck

How does sole proprietor workers’ compensation insurance work?

Let’s say you get sick or injured on the job and need to go to the hospital. This type of sole proprietor insurance would likely cover those costs. If your injury required rehabilitation, those costs could be covered as well. And if you lost income as a result of the injury or rehab, your policy could be there to help.

Looking for more information? Check out the Workers’ Comp section in our Resource Center.

Is sole proprietor workers’ comp required by law?

As mentioned above, certain states may require that you have workers’ comp coverage for certain types of jobs. It’s best to check the regulations in your area. If you’re doing business across state lines, it’s also important to know the workers’ comp laws in those locations.

What is a workers’ compensation ghost policy?

A ghost policy is a type of workers’ compensation policy for a business with no other employees other than the owner. Generally, the owner is excluded from workers’ comp coverage under this type of policy.

Since premiums for workers’ compensation policies are often based on employee payroll, ghost policies are often less expensive than traditional workers’ compensation coverage.

Why is sole proprietor workers’ comp coverage important?

You’re the motor that makes your business run. If an accident or an injury on the job puts you out of action, there’s a good chance that your business, and all that it provides, could come to a screeching halt.

Is sole proprietor workers’ compensation insurance tax-deductible?

Generally speaking, the IRS considers sole proprietor workers’ comp premiums as business costs, which are typically income tax deductible. In many cases, this applies to your state and local taxes as well, but it’s a good idea to check with a tax preparer or an accountant.

How much does a sole proprietor workers’ compensation policy cost?

Premiums are determined by several factors, such as:

  • The state or states where you work
  • Annual revenue or income
  • The type of work you do
  • Your insurance claims history
  • Your payroll

Ready to get a small business quote started? Try our free online quote tool.

For personalized answers to your questions, you can speak with one of our licensed agents. Just call 844-654-7272. They’re available Monday-Friday, 8 a.m.-8 p.m. ET.

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