If you receive a W-2, your employer is most likely required to provide workers’ comp coverage, which pays medical bills and some lost wages if you are injured on the job. In exchange for this coverage, you waive the right to sue you employer for injuries, although you still may be allowed to sue in certain circumstances.
Do I need workers’ comp insurance?
Workers who are not classified as employees receive a 1099 form at the end of the tax year. Unscrupulous employers sometimes miscategorize employees as independent contractors or consultants to avoid paying workers’ comp premiums and other expenses for them.
Employers are not required by state law to purchase coverage for independent contractors, but many companies who hire independent contractors require them to have their own workers’ compensation coverage.
Independent contractors who are injured while performing work for a company and are not covered by workers’ comp may sue for injuries or use arbitration to receive compensation. Depending on the risk of injury associated with the job, the company may conclude that the potential costs of a lawsuit is not worth hiring an independent contractor.
With this in mind, independent contractors may decide that the cost of workers’ comp insurance is worth it to get more work. If you are an independent contractor, purchasing a workers’ comp policy is vital if you want to be covered in case of an injury sustained on the job. The cost and amount of coverage you need usually depends on the inherent risks in the type of work you do.
If you are an independent contractor who isn’t working for a company, you also should consider purchasing workers’ comp insurance. If your job involves a high risk of injury and you hurt yourself, you may not be able to work for weeks or even months. Although medical insurance may cover some expenses, lost wages can have dire financial consequences.
How to Get Workers’ Compensation Insurance
If you’re a freelancer who performs low-risk work such as writing or graphic design, it may be difficult to find a workers’ comp policy. Many major insurers do not offer such small policies, but small private insurance companies may offer workers’ compensation policies. Many states also have workers’ compensation funds for those who can’t find a policy on the voluntary market. Depending on the state, sole proprietors, freelancers and independent contractors may be able to purchase a policy from these funds if they can’t receive coverage from private insurers.
If you are an independent contractor and have been injured on the job or have questions about workers’ compensation coverage, the experienced legal team at Gold, Albanese & Barletti, LLC, can help you determine the best course of action. Contact us at 732-936-9901 to schedule a free consultation.