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Common Client Requirements for Workers' Comp

As we’ve discussed elsewhere, it’s common practice for a client to request that their technology contractors carry their own Workers’ Compensation Insurance. Asking you to have your own Workers’ Comp policy is a simple way for a client to keep their costs low while ensuring that they’re in compliance with state requirements for all workers to be covered.

But what exactly should you expect from a client’s contract? How much coverage are they likely to ask for? And what might that level of Workers’ Compensation cost you? Read on to find out what to expect from a client’s Workers’ Comp requirements.

Common Workers’ Comp Requests in Client Contracts

As with anything related to insurance, we have to mention here that the specifics vary from one case to another and no two client contracts are alike. But given the variations that are bound to occur, here’s a general idea of what you might see in a contract:

  • $500,000 in Workers’ Compensation benefits. This is a common coverage limit we’ve seen in contracts for technology companies. Why? Probably because state law requires that much coverage for each worker (though keep in mind that laws are different from one state to another).
  • Option to waive coverage if you have no employees. This one may be confusing, but we’ve seen it regularly in the requirements companies outline for their IT contractors. If you are working as a contractor and you have no employees (i.e., it’s just you offering services to a larger client company), your contract may say that you don’t have to carry Workers’ Comp. Again, that likely aligns with state laws. Many states give sole proprietors with no employees the option of not covering themselves at all.
  • A cost of $300 to $1,000 per year. This is quite a range, of course, but it’s at least a ballpark. A lot of factors affect costs, including the specific kind of work you’re doing, the environment you’ll be in, and the state where you’re operating. Depending on how all these come together, you can reasonably expect to pay as little as $300 per year and as much as $1,000 per year for your coverage. And of course, you may also pay more or less, depending on your business. (For more detailed insurance cost estimates, see our page How Much Does Business Insurance Cost?)

Making Sure You Meet Workers’ Compensation Contract Requirements

Once you have a client contract in hand, you can secure Workers’ Compensation coverage by applying online through a site like TechInsurance (obviously the option we recommend), going to your state carrier (if you’re in one of the four states that only sell coverage that way: North Dakota, Wyoming, Ohio, and Washington), or going to an insurance agent you already have a relationship with.

Your agent (whether someone you already know or someone you meet through TechInsurance) will be valuable as you determine whether the policy you’re considering meets the requirements in your contracts. Be sure to share those requirements with your agent as soon as possible: knowing what you need makes it easier for your agent to recommend the policy that makes the most sense.