If you’re self-employed, you probably wear many hats. You’re the boss, the worker, the accountant, and even the customer service rep. With so much on your plate, it’s easy to overlook something like workers’ compensation insurance. After all, you don’t have employees—so why would you need it?
But the truth is, workers’ compensation insurance can still be important for people who work for themselves. This article will help you understand what it is, how it works for self-employed individuals, and whether or not you should consider getting it.
Let’s break it down in simple terms.
What Is Workers’ Compensation Insurance?
Workers’ compensation insurance, often just called “workers’ comp,” is a type of insurance that pays for medical bills and lost wages if someone gets hurt or becomes ill because of their job. It can also provide benefits to the family if the injury or illness leads to death.
Normally, this insurance is used by businesses to protect their employees. In most states or countries, companies are required by law to have workers’ comp if they have workers on their payroll. This helps employees get help quickly without having to sue their employer.
But when you’re self-employed, the rules are a bit different.
Can the Self-Employed Get Workers’ Compensation?
Yes, self-employed people can usually buy workers’ compensation insurance for themselves. Some insurance companies even offer special policies just for sole proprietors, freelancers, independent contractors, or gig workers.
It’s often called “voluntary workers’ compensation” when it’s purchased by someone who isn’t required by law to have it. That means you’re choosing to get it to protect yourself, even though no one is forcing you to do so.
Is Workers’ Compensation Required for the Self-Employed?
In most places, self-employed individuals are not required by law to have workers’ compensation. However, there are a few exceptions where it might be mandatory:
If you hire other people – Once you have employees, even part-time or temporary, many regions require you to have workers’ comp for them.
If you work in certain industries – For example, some states or industries (like construction) may require independent contractors to have it.
If a client or company requires it – Sometimes, clients won’t let you work on a job unless you can show proof of workers’ comp insurance. This is common in construction, delivery, or government contracts.
So even if you’re self-employed and working alone, there may be situations where having workers’ comp is necessary.
Why Would a Self-Employed Person Want Workers’ Compensation?
You might think, “Why do I need workers’ comp if I work for myself?” It’s a fair question.
Here are some good reasons to consider it:
1. To Protect Yourself If You’re Injured
If you get hurt on the job, you might not be able to work for days, weeks, or even longer. Workers’ compensation can help pay for:
Medical bills
Physical therapy
Prescription medications
Lost income while you recover
Health insurance might cover some of these costs, but it won’t pay you for the wages you lose. Workers’ comp can fill that gap.
2. To Avoid Financial Ruin
Many self-employed people don’t have paid sick days. If you can’t work, you don’t earn. That can be a big problem if your injury keeps you off the job for a while.
Workers’ comp helps replace a portion of your income while you recover, so you can still pay your bills.
3. To Qualify for Bigger Jobs
Some companies require proof of insurance before they hire you. If you don’t have workers’ comp, you might lose out on big contracts. Having it shows that you’re professional and prepared.
4. To Get Peace of Mind
Running your own business is risky enough. Having workers’ comp can give you peace of mind. You know that if something goes wrong, you’ll have help.
Who Might Benefit Most from Workers’ Comp as a Self-Employed Person?
Not every self-employed person needs this insurance, but some people might want to think harder about getting it.
Here are a few examples:
1. Independent Contractors in Physical Jobs
If you work in construction, plumbing, roofing, or landscaping, the risk of injury is higher. These jobs involve tools, ladders, and heavy lifting.
Even one small accident could lead to serious injuries and time away from work. Workers’ comp is a smart safety net.
2. Freelancers Who Travel or Drive Often
Do you drive long distances to meet clients or deliver goods? A car accident while on the job can cause injuries and missed work.
Workers’ comp can cover these kinds of injuries if they happen while you’re working.
3. Gig Workers
People who drive for delivery apps or rideshare companies are technically self-employed in many places. If you’re injured during a shift, you may not be covered by the platform.
Having your own policy can help.
4. People Who Work with Their Hands
Artists, crafters, bakers, stylists, and massage therapists use their bodies to earn a living. An injury to your hand, wrist, or back could mean you can’t do your job.
Workers’ comp can be a big help while you recover.
What Does Workers’ Compensation Typically Cover?
Most workers’ comp policies include coverage for:
Emergency care and hospital visits
Follow-up doctor visits
Physical therapy
Lost wages (usually around 60–70% of your normal pay)
Disability benefits if the injury is long-term
Funeral costs (in the worst-case scenario)
It’s important to read the details of your policy carefully. Some policies might have limits or exclude certain types of injuries.
Also, the coverage only applies to injuries or illnesses that happen because of your work. If you get hurt while doing something unrelated to your job, it won’t be covered.
What Are the Alternatives to Workers’ Compensation?
If you decide not to get workers’ comp, you might want to look at other types of protection.
1. Health Insurance
Health insurance covers medical costs, but it won’t pay you for time you can’t work. It’s still important to have, especially in countries like the U.S. where medical care is expensive.
2. Disability Insurance
This is another option. It pays you a portion of your income if you become too sick or injured to work, even outside of work-related causes. It can help cover living expenses during recovery.
3. Business Liability Insurance
This won’t cover your own injuries, but it protects you if someone else gets hurt while dealing with your business. For example, if a customer slips and falls in your home office.
How Much Does Workers’ Compensation Insurance Cost?
The cost depends on several things, like:
Your industry (riskier jobs cost more)
Your location (state laws vary)
Your earnings
The insurance provider
For low-risk professions, you might pay a few hundred dollars per year. For higher-risk jobs, it could be over a thousand. It’s a good idea to shop around and compare quotes.
Some states even run their own workers’ comp insurance programs. In others, you’ll need to buy from a private company.
How to Get Workers’ Comp as a Self-Employed Person
Here’s a basic step-by-step guide:
Decide if you want coverage – Think about your job, the risks, and your financial situation.
Check your local laws – Make sure you understand the rules in your state or country.
Get quotes from insurers – Compare plans and prices from a few companies.
Choose a policy – Pick the one that fits your needs and budget.
Keep your records up to date – Some providers might ask for your income records or tax forms each year.
If you hire others in the future, make sure to update your policy. You’ll likely be required to provide coverage for them, too.
Conclusion
There’s no one-size-fits-all answer. Some self-employed people really need workers’ compensation. Others may be fine without it. It depends on your job, your risk level, and your peace of mind.
But here’s the key question to ask yourself:
What would I do if I got hurt and couldn’t work for a month, or even longer?
If that idea worries you, then it might be worth looking into workers’ compensation. It’s not just for big companies—it can be a smart move for solo business owners, too.
Related topic:
5 Best Physician Assistant Malpractice Insurance
How to Calculate Property Insurance Premium? A Step-by-Step Guide
