Starting in 2024, California’s new SB-216 law requires more contractors, even those with no employees, to have workers’ compensation insurance. At first, this law mostly targets high-risk trades such as plumbing, electrical work, HVAC, roofing, and concrete work. Contractors in these fields must carry workers’ comp by January 2024.
*But all contractors will need workers’ comp by 2026.
So, if you’re in one of these trades, you need workers’ comp insurance no matter what. But by 2026, all licensed contractors will need this insurance, regardless of their size or employee count. So it’s a good time to get covered with construction insurance.
Why Workers’ Comp Matters:
- Protects You Financially: If an accident happens on the job, workers’ comp helps cover medical bills and lost wages.
- Gives Clients Peace of Mind: Clients feel safer hiring insured contractors, which can make your business more attractive.
- Helps Attract Workers: Having insurance is a plus for skilled workers who want job security.
Learn more about workers’ comp insurance.
How to Get Ready for SB-216 Requirements
- Double-Check Your License: Look up your trade classification to see if you fall under this new requirement. If you’re in one of the listed high-risk trades, you’ll need workers’ comp coverage starting in 2024.
- Find an Affordable Policy: Even if you have no employees, look for a “minimum premium” workers’ comp policy that fits your budget. Pogo Insurance has a great “ghost policy” market that is the minimum premium (cost) per state.
- Stay Organized with Your Documentation: You’ll need to keep proof of insurance handy, as some clients may ask to see it, and the state could check up on your compliance too.
- Plan for the Future: If you’re not impacted right now, you still need a policy by 2026—so it’s a good time to start budgeting.
Not having workers’ comp could mean fines, license suspension, or worse—being financially responsible for injuries. So, stay ahead of the game and get insured! Pogo Insurance can help by comparing all your self-employed insurance options with one simple application. (And, we can cover your liability, property, and umbrella insurance, too!) You’ll pay the same price as you would if you bought directly from the insurance company, but with a dedicated insurance specialist who can help you will all commercial insurance. Get a Free Estimate
Why SB-216 Matters for Your Business
The law’s purpose is to make sure contractors in high-risk trades are protected financially if an accident happens on the job. Here’s why it’s beneficial for you:
- Protects You and Your Business: Workers’ comp insurance can cover medical costs and lost wages if you, an employee, or a subcontractor gets hurt. In a trade with heavy lifting, dangerous equipment, or physical risks, this protection can make a big difference. This is particularly tricky with businesses that hire subcontractors. To learn more, check out our Subcontractor Insurance Requirements guide.
- Makes Clients Feel Safer: Many clients only want to hire insured contractors to avoid being liable if something goes wrong. With this insurance in place, you’ll be more appealing to clients and might get more job offers.
- Better for Attracting Skilled Workers: If you have employees or plan to hire, offering workers’ comp can make you a more attractive employer in the skilled trades market.
How SB-216 Could Impact Your Budget and Pricing
Workers’ comp coverage is a new expense, so you may need to adjust your budget or pricing slightly. Here’s how to think about it:
- Premiums: Workers’ comp costs depend on factors like your trade’s risk level, your payroll, and the number of employees (if any). For high-risk trades, premiums can be higher, but for solo contractors, basic plans are often available.
- Price Adjustments: With this new insurance cost, you might need to adjust your project rates a bit to cover the added expense. Be open with clients about the value of insurance—it’s there to protect everyone.
Learn more about cost factors with this Workers’ Comp Cost Guide
What Happens if You Don’t Comply?
If you skip getting workers’ comp insurance when it’s required:
- You could face fines or even lose your license.
- If an accident happens, you could be liable for all medical costs, wages, and damages out of pocket—which could be financially devastating.
- Do I need workers’ comp if I have no employees? Typically, yes. Learn more about workers’ comp with no employees.
Bottom Line
The new SB-216 law is designed to protect contractors and clients alike by ensuring all contractors in higher-risk trades have workers’ comp insurance. It’s a step toward making workplaces safer and more secure. As an artisan contractor, this law means you need to get insured if you aren’t already. By planning ahead, you’ll protect your business, make yourself more appealing to clients, and set yourself up for success as California’s regulations evolve. Get covered with artisan contractor insurance today!