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Client requirements for workers' comp

It's not unusual for a client to require their tech contractors to carry workers' compensation insurance. Learn what to expect from a client contract, including how much you can expect to pay for this policy.

What can I expect in a client contract that requests workers' compensation?

When a client asks you to purchase your own workers' compensation policy, they're trying to keep their costs low while ensuring they’re in compliance with state requirements for all workers to be covered.

The specifics vary from one case to the next 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. That's 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. We see this regularly in the requirements companies outline for their IT contractors. If you are working as a contractor and you have no employees, 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 median premium of $35 per month. Several 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. (Read more about workers' compensation insurance costs.)

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How can I meet a client's requirements for workers' compensation?

Once you have a client contract in hand, you can secure workers’ compensation coverage by applying online through a site like TechInsurance, going to your state carrier (if you’re in one of the four states that only sells coverage that way: North Dakota, Wyoming, Ohio, and Washington), or going to an insurance agent.

Your agent (from TechInsurance or elsewhere) 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.

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