Will Your Technology Business Qualify for a Workers' Compensation Waiver?
As you probably already know, most states require businesses with employees to carry a Workers’ Compensation Insurance policy. But if you’re on this page, you’ve probably also heard that it’s sometimes possible to get a waiver of your Workers’ Comp requirements. Read on for the juicy details about when and how this happens and whether having your requirements waived could save your business money.
Workers’ Comp Waivers from a Client
The first scenario in which you might encounter a Workers’ Compensation waiver is when you’re contracting with a larger company. In many cases, these companies include language in their contracts requiring the contractor (you) to carry Workers’ Compensation coverage.
This is a standard legal protection that helps your clients manage their costs: rather than paying for the cost of your coverage themselves, they make you pay for it. Neat, right?
But in some contracts, you’ll find language that says you can waive your Workers’ Comp requirements, often if you’re the only person involved in the contract. So if you don’t have employees and you’re okay with self-insuring (i.e., assuming you’ll be able to pay your own medical costs if you’re injured on the job), you may be able to sign a waiver saying you’ve chosen not to secure Workers’ Comp coverage.
Why bother with the waiver in the first place? Again, it’s a legal protection for the company you’re working with. By getting proof in writing that you essentially gave up your right to protection from workplace injury, your client is covering its back in the event of a lawsuit.
Workers’ Comp Waivers Based on State Law
The other scenario you might choose to waive your Workers’ Comp Insurance requirement has nothing to do with which clients you’re working with.
In this scenario, you live in a state that doesn’t require you to carry a Workers’ Comp policy. Many states give you the option of opting out of coverage if…
- You have no employees.
- You have employees but choose not to cover yourself with your policy.
In much of the country, Workers’ Compensation laws essentially give you the option of saving money by not covering yourself. The thinking goes that you can’t make such a decision for your employees (i.e., if you have employees, you owe them a duty of paying for their workplace injuries), but you can make the decision for yourself (i.e., you can play your odds and hope you have enough money to afford your medical bills if you’re hurt at work).
Ask Your Insurance Agent before Waiving Your Workers’ Comp Coverage
Workers’ Compensation is a complex topic. If you’re not an expert, it’s a good idea to talk with an insurance agent before making a decision either way about your coverage. Your agent can help you understand the possible ramifications of foregoing coverage and whether the financial savings is worth the increased risk you’ll face.
If you don’t yet have an agent, feel free to contact us for more insight on your company’s Workers’ Compensation requirements.