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A Helpful Guide to Workers Comp Insurance for the Self Employed

3-minute read

Ed Grasso

Ed Grasso

14 March 2024

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When you’re self-employed, you do the work yourself, you do the billing yourself, and you likely empty the waste baskets yourself. As you can see, there’s a lot of emphasis on “self” in “self-employed.”

That’s probably a good reason to consider taking care of “yourself.” And that’s where workers’ compensation insurance for the self-employed owners can make a difference for your business.

What Does Workers’ Compensation Insurance Cover for the Self-Employed?

Workers’ compensation insurance for a self-employed person can cover many of the same claims as workers’ compensation insurance for small business owners with employees.

These can often include:

  1. Medical payments — If you get sick or injured on the job, it may help pay medical bills.
  2. Rehabilitation expenses — Sometimes, treating an illness or injury is just the first step. Rehabilitation and therapy also may be required. If so, your workers’ comp policy could cover those costs.
  3. Lost wages — Recovering from a work-related injury or illness also could keep you out of work. If you’re self-employed, that could bring your business to a screeching halt. That’s when a workers’ compensation policy might kick in to make up some of your lost income while you recover.
  4. Death benefits — If you die as a result of a workplace injury or illness, your workers’ comp policy may help cover funeral expenses and provide financial assistance for your family.

Am I Required to Have Workers’ Compensation Insurance if I’m Self-Employed?

Laws and regulations around workers’ compensation insurance vary from state to state. For example, in most instances, Texas doesn’t require an employer to have any type of workers’ comp insurance. But travel next door to New Mexico, and most businesses with three or more employees need workers’ comp coverage.

In many instances, you’re required to have workers’ comp insurance as soon as you hire your first employee. That can include both full-time and part-time workers, but again, each state has its own regulations, so it’s important to check the laws where you do business.

As you're looking through your state’s requirements, you may find that owners and business officers may be exempt from workers’ comp coverage. This is often a reason why business owners will cover only their employees as a way to save on insurance premium costs.

Why Consider Workers’ Compensation Insurance if it Isn’t Required for Self-Employed People?

Staying on the right side of the law in states that require workers’ compensation insurance is just one benefit, but it’s not the only one.

Here are a few others:

  1. You do high-risk work — If you’re in a field like construction or roofing, a customer, contractor, or client may require you to have workers’ comp coverage as a way of protecting themselves from liability if you get injured or ill while working for them.
  2. You do all the work — As we mentioned earlier, if you’re a one-person operation and you get injured or sick, your business may not be able to continue to operate.
  3. Your health insurance may not be enough — There’s a chance your health coverage won’t pay for work-related injuries. Even if it does, you could be looking at a hefty deductible, and there may not be any coverage for lost wages.

How to Purchase Workers’ Comp Insurance for the Self-Employed?

While understanding the ins and outs of workers’ compensation insurance may feel like a lot of work, getting covered doesn’t have to be, at least if we have anything to say about it.

Spend some time on our website, and we’ll get to work looking for quotes from respected workers’ comp insurers. Then all you have to do is choose the insurer that’s best for you.

We also have licensed insurance pros who can help you over the phone. Just call 844-654-7272, Monday-Friday, 8 a.m.-8 p.m. (ET).

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How Much is Workers’ Compensation Insurance for the Self-Employed?

While the need for workers’ compensation insurance is almost universal for any business with employees, the amount you’ll pay for that coverage can vary.

In most cases, your cost will depend on several factors, such as:

  1. Where you work. Laws can differ widely among states and have an impact on who is required to be covered and when you need to provide coverage.
  2. Your revenue and payroll. How much money you have coming in and how much is going to your payroll will affect your workers’ comp quotes.
  3. What you do. Businesses that are at higher risks for work-related injuries often incur higher costs for workers’ compensation insurance.
  4. Your claims history. The number and seriousness of any previous workers’ compensation claims also can affect the price you’ll pay for workers’ comp coverage.

We’ll Help You Take Care of Yourself

You’ve likely heard that a business’s greatest assets are its employees. When you’re self-employed, that greatest asset is you. Why not take care of it the way you would any other vital part of your business?

We work with thousands of self-employed individuals like you. We can assist you in finding coverage that could help protect your livelihood and your budget.

We can assist in other ways, too. Our Resource Center is chock-full of small business marketing guides and tools. It can provide all sorts of helpful information about workers’ compensation. For example, here are three more recommended articles:

Ed Grasso

Written by

Ed Grasso

As a 9-year-old at summer camp, I hated it — especially after being pulled screaming from the pool during the swimming competition. While this left me without an aquatic achievement patch, it also inspired the letter to my parents that got me an early release from Camp Willard. That showed me the power of writing. I’ve done my best to use it only for good ever since, such as writing helpful articles for small business owners.

Ed writes on a number of topics such as liability insurance, small business funding, and employee management.

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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