Workers’ Compensation Insurance for Independent Contractors, Subcontractors, Freelancers, and Consultants
According to the Insurance Information Institute, most states view uninsured contractors, freelancers, and subcontractors as regular employees. Translation: if your contractor gets hurt, you can be liable.
Of course, it’s not always clear-cut. Laws vary by state, and there’s some wiggle room for how courts interpret them. (But let’s face it, you probably don’t want to end up in court over this.)
Independent contractors fall into a gray area for Workers’ Compensation Insurance. They’re not technically employees, but the law could hold you responsible for their injuries. The bottom line: you don’t want to risk being liable. If you’re going to hire contractors…
- Work with IT staffing agencies that provide Workers’ Comp for their contractors, OR
- Add contractors to your Workers’ Compensation Insurance.
Not sure whether your state laws require you to cover contractors? Scroll down to our section on state Workers’ Comp laws.
Workers’ Compensation Insurance for Startups
If you’ve ever worked at a startup, you understand that rapid-growth businesses are exhilarating, but they have more than their fair share of growing pains.
When you’re hiring new employees every month, it’s essential to make sure your infrastructure keeps pace. From a business insurance perspective, that means making sure your policies are the right size for your business.
As you add to your staff, talk with your agent to ensure you have enough Workers’ Compensation Insurance to meet your state requirements and cover new employees.
How Much Does Workers’ Compensation Insurance Cost?
Remember how we said that IT workers have less risk of injury than construction workers? The good news is that your low risk translates to lower premiums. But beyond relative pricing, it’s difficult to give estimates for Workers’ Comp.
Each state has different laws and therefore different coverage standards. Further, every employee is classified by the type of work they do to assess premiums. If one guy on your team is hunched over his desk all day and another one is out setting up servers, they’re going to have different classifications and cost different amounts to insure.
Still, it’s helpful to have a ballpark number in mind. Broadly, you might expect coverage in the following ranges (all prices are yearly):