Introduction
One of the most common questions small business owners and contractors ask is: “Do I need workers’ comp insurance if I don’t have employees?”
The short answer: It depends on your state, your business structure, and the type of work you do. Let’s break it down.
What Workers’ Comp Covers
– Medical bills and lost wages for employees injured on the job.
– Employer liability protection against lawsuits from injured workers.
When It’s Required
– Most states require workers’ comp if you have employees. The threshold can vary: some require it for just one employee, others only after a certain number.
– Sole proprietors and LLCs with no employees are often exempt — but not always.
👉 Example: In some states, construction contractors must carry workers’ comp even if they’re solo operators.
Why You Might Still Want It Without Employees
- Protecting Yourself: Some states let sole proprietors opt in so they’re covered for work injuries.
- Contract Requirements: Many general contractors or clients require subcontractors to carry workers’ comp before they’ll work with them.
- Peace of Mind: One accident on the job could mean thousands in medical bills if you’re not covered.
Alternatives and Options
– Some states allow you to purchase a “ghost policy” — a minimum workers’ comp policy that provides proof of coverage without insuring employees.
– Occupational accident policies can sometimes be used as an alternative for independent contractors.
Key Takeaway
Even if you don’t technically need workers’ comp by law, carrying it (or an alternative) can protect you, keep you compliant with contracts, and open up more job opportunities.
Conclusion + Call-to-Action
Workers’ comp requirements can be confusing, especially for small business owners and independent contractors. Don’t take chances — make sure you’re protected and compliant.
👉 Not sure if you need workers’ comp? Contact EL Risk today. We’ll review your state’s requirements and help you find the right solution.