Breaking the law can sometimes be thrilling, but you don’t want to get popped for not having workers’ comp insurance. It’s not a story you’d brag about. So instead, you’re probably wondering how to get around workers’ comp?
Here’s the reality: There’s no way to get around workers’ compensation, if you have employees.
(*If you don’t have employees, but use subcontractors instead, read this: Subcontractor Workers’ Compensation Requirements)
But before you freak out, relax! We can help you figure out the best options.
The requirements vary by state, business size, and industry, but generally you’re required to have workers’ comp if you have employees (even if you’re in a low-risk industry). And many states will give you daily fines for not having a valid workers’ compensation policy.
If you are required by law to have workers’ compensation insurance for your employees, you need to do it. Living on the edge could leave you facing major fines, lawsuits, and even criminal charges. If you’re going to break the law, wouldn’t you rather it be for something a little more exciting?
Self-employed? Read our Guide to Workers’ Comp When You’re Self-employed.
The laws and requirements vary by state.
Sometimes, if you have five or fewer employees, you don’t need the coverage. In other states, the coverage is mandatory even when you only have even one employee.
If you don’t have full-time employees, you could maybe skirt around workers’ comp, but the laws are changing, and you’ll need to start providing coverage for people who aren’t full-time. (Unless they have their own workers’ comp coverage.)
Here’s an easy way to find out if your state requires you to have workers’ compensation insurance.
Let’s say you still don’t want the coverage. You’d rather risk it because you think it’s a waste of money.
Spoiler alert: Just because you don’t have workers’ comp doesn’t mean you won’t be held responsible should an employee face an illness or injury.
In other words, you can choose to get it or not get it. But either way, you will have to pay should something happen – except with workers’ comp, your payments will be smaller and cheaper rather than paying for expensive, unexpected medical bills and lawsuits.
Your best bet is to find an affordable workers’ comp policy.
Workers’ compensation can help protect both your business and your bank account. If something happens to your employee sans workers’ comp, you will have to pay for the claim out of your personal pocket. Wouldn’t it be better if a big insurance company had your back in the case of an expensive medical claim?
Don’t have employees? That’s a different story.
Do I need workers’ compensation if I don’t have any employees? If you don’t have employees, you’re typically not required by law to have workers’ compensation. But keep in mind that if you use contractors, leased employees, or subs, a lot of states will require you to cover type of worker who does work for you, not just employees.
Also remember that even if you’re legally exempt from buying workers’ comp, you’ll still be liable for anyone who gets hurt while working for you. That’s why if you use subcontractors, you should also require them to have their own insurance.
And if you yourself are an independent contractor, you’ll probably be required to cover yourself with a workers’ comp policy to get hired for certain jobs.
If you need workers’ comp to get hired, but you’re trying to figure out a way to get around workers’ comp, you could get a quote for a minimum premium workers’ comp policy (minimum premium = lowest price). That’s your best option.
Minimum premium workers’ comp policies
You can also buy what’s called a workers’ compensation “ghost policy,” which is even more inexpensive. A ghost policy excludes the owner from coverage. That’s why it’s less expensive. It provides assurance to the hiring party that they won’t be responsible for you if something happens.
Note: We only recommend a ghost policy if you’re in a low-risk industry and you aren’t likely to get injured.
Want to protect what you work hard for?
We’ll help you compare top workers’ comp providers with just one quote form, for free. And fast! Whatever your situation is, we can help find the most affordable option. Get workers’ comp.
Learn more about other types of business insurance.