Learn the rules around protecting yourself with your business’ Workers’ Compensation insurance.
As a small business owner, you want to help protect your team from workplace injury and illness with workers’ compensation insurance. But what about your own protection? Have you ever wondered, “Do I need workers’ comp for myself?”
Many benefits and drawbacks around adding yourself to your company policy should be considered before you take on the extra premium. Keep reading to learn why you may or may not want to add yourself to your policy.
Jump ahead to learn:
Workers’ comp insurance can help provide financial protection for employees who suffer work-related injuries or illnesses.
It can help cover an employer’s cost for medical expenses, rehabilitation costs and a portion of lost wages. In the U.S., most state laws require workers’ compensation coverage for businesses with employees.
However, just because you pay for workers’ comp for your employees doesn’t mean that you’re covered. Business owners can also benefit from workers’ comp protection.
Without covering yourself with workers’ comp, you might have to pay out-of-pocket medical expenses. Additionally, you might lose income if you cannot work during recovery, potentially leading to financial strain.
Adding yourself to your own insurance is common in the construction industry since many contracts require contractors and subcontractors to have a workers’ compensation insurance policy. So, if you’re a general contractor working at job sites with your employees, it wouldn’t be unusual to be covered by the same insurance policy. You could face significant medical expenses and lost wages like your employees if you’re injured at work.
This is the same for other professions, such as cleaners and fitness professionals. People who do very physical work could benefit from this coverage.
While business owners are not automatically covered, they can purchase add-on coverage to get the same protection as their workers. Including yourself in your workers’ comp insurance coverage can be smart for small business owners. Here’s why:
Though adding yourself to your company workers’ comp policy could result in an increased premium, knowing you’re protected in case of a costly work-related injury can help ease strain about the future health of your business.
If you’re self-employed and/or a sole proprietor, the rules and regulations for workers’ comp can be more complex. It’s best to consult with an insurance agent or legal professional to understand the nuances of your specific situation and compliance with regulations.
You may already have health insurance and wonder if that coverage is sufficient — why add yourself to your own workers’ comp coverage? Each type of insurance serves different purposes, so you may need both to be fully covered.
Your personal health insurance helps cover costs if you get sick or injured, but it may not always cover a work-related injury. Health insurance also won’t cover lost wages if you miss work because you are sick or recovering from an injury.
Conversely, workers’ comp is only for work-related illnesses and injuries. It doesn’t serve as a replacement for traditional health insurance for you or your employees.
NEXT is 100% dedicated to helping self-employed individuals and small business owners find affordable business insurance. Because we only help business owners like you, we can create a customized insurance package to meet your unique needs.
Our services are online, so you can get an instant quote, review options and purchase coverage in about 10 minutes. You’ll have immediate 24/7 access to your certificate of insurance as soon as you buy your insurance.
And if you need help, our team of U.S-based insurance advisors is standing by to help if you have any questions.
Kim Mercado is a content editor at NEXT. She writes and edits content for small business owners, and enjoys helping entrepreneurs solve their business challenges and learn about insurance. Kim has contributed to Salesforce, Samsara and Google.
You can find Kim trying new recipes and cheering the 49ers.
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