How to Secure Workers' Compensation Insurance as a Technology Contractor
So you’re an IT consultant and you’ve got a client. Congratulations! That means you’re earning revenue. But if you’re working as a contractor for that client, chances are good that they’ve requested proof of Workers’ Compensation Insurance from you.
So how do you go about getting that coverage? And why do you have to bother at all? Read on for answers.
Finding a Workers’ Compensation Policy as a Technology Consultant
The first thing to know about Workers’ Comp Insurance is that it’s governed by state law. So the path you take to secure coverage will depend in part on where you live.
There are four states that only sell Workers’ Comp coverage through monopolistic, state-run providers. Those states are:
- North Dakota
If you live and work in any of these states, your only option for securing Workers’ Comp as an IT consultant is to go directly to the state fund. Even if you apply for other types of business insurance through a site like TechInsurance, you won’t be able to get Workers’ Comp from anyone but the state.
For everyone else, finding Workers’ Compensation Insurance is much like finding any other type of business insurance. You can apply online through an agency like TechInsurance or you can go to your existing insurance agent to see what kind of policies they’re able to offer you.
On our site, you’ll be taken through an online application and sent quotes from whichever carriers we have that can write policies for technology companies like yours operating where you operate.
Why Bother with Workers’ Compensation Insurance as a Technology Contractor?
The second part of the Workers’ Comp question for many IT consultants is why: why bother with this coverage when you’re the only one in your business? Or for that matter, why bother if state law lets you opt out as the owner (which is pretty common)?
The answer is pretty straightforward: because your clients want you to have this coverage. In fact, many client contracts require that you, the IT contractor, have your own insurance.
The reason for this is a simple matter of liability. If you’re working in the client’s office (and in some cases, even if you’re not), they may be responsible for having a Workers’ Compensation policy that covers you – or, if they don’t, for making sure that you have coverage for yourself. Because adding a person to a Workers’ Comp policy always means an increase in premium, it’s common practice to require that contractors have this coverage for themselves.
So if a contract does require you to have your own coverage, be sure that your prices reflect the fact that you’ll have to buy this policy for yourself.
On a similar note, if you are hiring independent contractors, 1099s, or subcontractors to work on projects with you, be sure you’re familiar with your state’s requirements regarding Workers’ Compensation Insurance. Depending on where you live, you may be required to have coverage for even 1099 workers – or to verify that they have this coverage for themselves.
If you don’t live in one of the monopolistic Work Comp states, you can apply for coverage through TechInsurance today by filling out an online application.