What does workers’ comp cover?

If you do happen to get hurt on the job or experience a work-related illness, workers’ compensation will help. Even if you’re not in a highly physical industry like photography or artisan furniture making, you can still get injured.

  • Medical costs due to work-related sickness or injury
  • Services needed to help recover and return to work
  • Reimbursement for lost wages
  • Protection from employee lawsuits (for medical expenses and lost wages)

Do freelancers need workers’ compensation insurance?

Workers’ comp is good to have when you work for yourself, but overall, you’re not legally required to have it as a freelancer if you don’t have any employees. However, the rise of the “freelance economy” is changing the employment landscape.

Often times, your health insurance will not cover work-related injuries. If you are required to take time off work due to your illness or injury, who will replace your income? Do you have disability insurance?

These are the types of things that a workers’ compensation policy can help you with.

Clients may require you to have workers’ compensation insurance in the contract.

Even if what you do has extremely low physical risk (like data entry for a transcription company), companies are starting to require you to provide proof of insurance. But why? It seems so non-dangerous.

Employers don’t want to be responsible or liable for you.

There have been a ton of cases popping up where a company hires a freelancer without coverage, and when the freelancer gets hurt they suddenly claim to be an employee, hoping to collect workers’ compensation benefits from the employer.

Example: A freelancer from Atlanta realized how serious clients were about employing freelancers with workers’ comp coverage after bidding on a project with an event planning company.

“They said I needed to cover myself with workers’ comp. I work from home… I didn’t think it was something I would ever need.”

Are you a freelancer or an employee?

Are you sure you’re considered a freelancer? Just because you view yourself as one doesn’t mean the government sees you that way. The classification of employees is usually determined by things like how much control your employer has over your schedule and how “independent” you actually are. And when it comes to workers’ comp, it matters.

  • If the government considers you an “employee”, then workers’ compensation is your employer’s obligation.
  • If the government considers you a “freelancer”, then workers’ compensation coverage is your responsibility, and you need to make your own arrangements.
Note: The IRS and the Workers’ Compensation Commission view employees differently, and it’s all based on how much control the “employer” has over the “employee”.

Make sure you’re careful when you hire other freelancers.

If you hire someone else to help out on a project, you can be held liable for any work-related illness or injury they experience while on the job.

Unless you want to cover them on your own workers’ compensation policy, make sure you require them to give you proof of their own insurance policies in the form of a Certificate of Insurance, or COI.

Example: You’re a freelance photographer and you hire a part-time assistant (who is a fellow 1099er). If she trips over an extension cord at the studio and breaks her finger, your workers’ comp policy would help pay for her medical bills. Then when it’s time for your audit, you will be charged the appropriate premium.

Common workers’ comp claims for freelancers

  • Repetitive stress injuries, such as carpal tunnel syndrome. These are often caused by excessive typing, data entry, sewing, painting, playing musical instruments, and designing without sufficient rest.
  • A car accident on the way to visit a client or make a bank deposit. Traffic accidents that happen while working are actually one of the biggest workers’ compensation death claims.
  • Injuries that happen on photo shoots, such as tripping over a light stand.

How much does workers’ comp for freelancers cost?

It all depends on where you live, what you do, and how many people you are including in the policy, but it’s not always as expensive as you’d think.

If you work in a low-risk industry, you’re not going to pay much. In fact, it’ll most likely be the minimum premium (the bare bones price for workers’ comp in your state).

It’s worth it to get a quote and see what your options are. Why not?