Workers' Compensation Insurance for IT Consultants
Depending on the size of your business and where in the country you operate, you may be required to purchase Workers' Compensation Insurance (commonly shortened to Workers' Comp or Workman's Comp).
If you're a sole proprietor, you don't have to worry about Workers' Comp until you hire an employee.
If you do have employees, most states require you to carry this coverage, which protects both you and the people who work for you. Here's an example of how: you own a small app-designing business and your one employee develops carpal tunnel syndrome.
In this case, Workers' Comp can pay for the employee's medical expenses, carpal tunnel surgery, rehabilitation costs, and lost wages.
It can also cover your legal expenses. Even though the employee receives medical treatment, they could still sue, claiming you didn't do enough to prevent their injury. If that happens, a part of Workers' Comp called Employer's Liability
Insurance pays for your legal defense and other lawsuit expenses.
Workers' Compensation Insurance covers a variety of workplace injuries and illnesses, even ones that are only peripherally related to work, like when an employee trips and falls at the office. You read that right – you can be liable when an employee is injured at your office, even if they're not injured because of work.
Workers' Comp Coverage includes payments for…
- Employee medical bills and rehabilitation costs.
- Wages an employee loses as a result of being unable to work.
- Disability expenses.
- Legal costs for employers sued by their employees after an accident or illness.
Next: How Do You Meet the Insurance Requirements in Your Contracts?