Saturday, August 13, 2022

Workers’ Comp Insurance For Contractors

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Amount Of Direction And Control

Workers’ compensation insurance for contractors and subcontractors: a video for employers

Independent contractors provide a service pursuant to a contract without the direction of the person paying the bill . An independent contractor controls how the service is provided, who provides it, and the method of accomplishing it. The key is that the independent contractor acts independently, free of direction and control of the hiring company .

What If I Dont Have Time To Go Through This Process

So by now, we understand what needs to be done to protect your business and protect you from additional and unnecessary additional premiums. But what if you dont do any of this?

Allowing a subcontractor onto the jobsite without their own coverage is a significant risk to your business.

Not only could you be on the hook for Workers Comp premium for that sub, if they are hurt on the job, it could be a claim on your policy, leading to increased premiums over the long term.

Most insurance carriers are wary of policy holders who use uninsured subcontractors because they are risks the carrier isnt planning for. Its common for policies to be canceled or non-renewed if uninsured subcontractors are used with any regularity.

Workers’ Comp Pays For Medical Treatment If You’re Injured On The Job

Your job doesn’t have to involve physical labor to put you at risk of injury. Years of typing on a keyboard could lead to carpal tunnel syndrome for a software developer. A computer repair technician could cut their hand working inside of a computer, which could put them out of work until it heals.

When you injure yourself on the job even by tripping in your office workers’ compensation kicks in to cover the cost of medical care. That includes doctor’s visits, prescriptions, and physical therapy. If you need to take time off work, workers’ comp benefits supply part of your missed wages.

This may sound like something that health insurance would cover, but insurers can deny claims for work-related injuries. Medical bills can also add up quickly, and workers’ compensation benefits can save your business in the event of a long recovery. That’s why independent contractors and sole proprietors may choose to buy this coverage for themselves, even when it’s optional.

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Paying Claims For Independent Contractors Can Harm Your Experience Modifier

If you are monitoring your experience modifier and attempting to manage claims as closely as possible, being liable for independent contractor injuries might not be in your best interests.

Companies are limited in the amount of oversight they provide to independent contractors and that limitation also applies to certain safety procedures.

This creates a situation where you are liable for paying the claim but have very little ability to manage your risk, which can lead to an increased experience modifier.

Will Becoming A Drug

8 Best Workers Compensation Insurance Companies
  • If you implement a drug-free workplace program in accordance with the criteria set forth in s.440.102, Florida Statutes, you may be eligible for a 5 percent premium credit from your insurance carrier to your workers’ compensation insurance premium. In addition to the premium credit, having a Workers’ Compensation Drug-Free Workplace Program may make your workplace safer, resulting in fewer accidents, which may reduce your workers’ compensation costs.
  • For more information please review Sections 440.101& 440.102, Florida Statutes.

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Where Do I Find Workers Compensation Insurance Coverage

  • Contact an insurance agent. You can also contact the following insurance agent associations:
    • Florida Association of Insurance Agents at
    • Latin American Association of Insurance Agents at 477-1442
    • Professional Insurance Agents of Florida at
    • If you cannot obtain coverage through the standard workers’ compensation market, your insurance agent may contact the Florida Workers Compensation Joint Underwriting Association at 378-7400 or visit their website at The workers’ compensation rates in the FWCJUA will be higher than the rates in the standard market.
  • By joining a commercial self-insurance fund where the members pool resources and spread liabilities for any commercial and/or casualty insurance for additional information please contact the Florida Office of Insurance Regulation.
  • You may also consider entering into an employee leasing arrangement with a professional employer organization that has secured workers’ compensation coverage on behalf of its clients.
  • For more information, please review Section, 440.02, Florida Statutes.

What Can I Do To Ensure My Subcontractors Are Covered

For now heres what to do:

If youre having trouble putting this all together, need support in setting up systems or processes, or have a unique situation that youre not sure how to address, call me or email me or click HERE to submit your contact info through our website and well get in touch with you soon. We can walk through any problems you may be having and offer solutions.

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Do Contractors Need Workers Comp Insurance

A self-employed contractor , typically does not need to carry workers compensation. With that being said, contractors purchase workers compensation insurance for multiple reasons:

To protect themselves and their subcontractors Handymen and contractors work in a risky industry. Given the labor, materials, and craft, accidents can and do happen. A contractor might take out insurance coverage just to ensure that they and their crew are covered.

For a job that requires employees If a job becomes bigger than one contractor to manage, they might need to hire employees. In this case , its likely that theyll be legally required to purchase workers compensation. Additionally, the client is probably going to want to ensure that their contractor and crew are covered, being that its a great risk management tool and accidents do happen on the job.

Laws demand it If a state has a specific law for contractors, they might be required to have a workers comp policy in place .

Additionally, contractors typically opt for a few other insurance coverage policies too. These include but are not limited to:

General liability insurance Professional liability insurance Commercial property insurance

Avoiding a lawsuit: If a contractors employees sustain a workplace injury, then workers compensation typically mitigates any chance of a lawsuit and protects the contractor from having to pay hefty costs associated with the accident.

Misclassifying Employees As Contractors And How And Why To Avoid This

Workers’ comp and statements to insurance companies

f you misclassify an employee as a contractor you can end up paying some hefty fines, which is why the six-part RCW 51.08.195 test is so vital when signing on a would-be contractor.

To avoid misclassifying employees as contractors the person in charge of hiring must be well-versed in the six-part test and should always verify the specific proofs have been submitted before the contract goes into effect. Here are some scenarios your company could face if the hiring or payroll manager were derelict in gathering the proofs required:

First scenario: Your neighbors son is home from college and has convinced you to hire him under the table so he doesnt have to pay taxes on his income. He falls and breaks his arm while working in your warehouse. Possible consequences:

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How Much Does Workers Compensation Insurance Cost

Pricing for Workers Compensation Insurance is based upon a number of factors, including:

  • Business location
  • Nature of the business, which is based on the industry classification code
  • Dollar amount of payroll
  • Claims history

Workers Comp premiums are usually quoted as a rate per $100 of payroll, and the range of premiums varies widely. Generally speaking though, you can assume that lower-risk industries and professions, like a desk job, will pay significantly less than higher-risk professions, like a roofer or construction worker.

Workers Compensation Rights For Independent Contractors In California

Independent contractors are not eligible for workers compensation coverage employers are not required by state law to purchase coverage for independent contractors.

Some employers misclassify employees as independent contractor to avoid paying payroll taxes and workers compensation premiums for them. Especially when a worker is injured, an employer may try to deny that the worker was an employee.

However, whether or not a worker is an employee is not controlled by what name the employer uses for the worker, but by the circumstances surrounding the employees work. Contact California Work Injury Law Center to ascertain whether you were properly classified as an independent contractor.

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What Injuries Are Not Covered

  • The law does not provide compensation for the following conditions:
    • Mental or nervous injury due to stress, fright, or excitement
    • Work related condition that causes an employee to have fear or dislike for another individual because of the individual’s race, color, religion, sex, national origin, age, or handicap
    • “Pain and suffering” has never been compensable in Florida, nor is it compensable in any other state. The employer may not sue an injured worker for causing a catastrophe nor can the injured worker sue the employer for their injury. This trade-off makes it possible for injured workers to receive immediate medical care, at no cost to the injured worker, without any consideration for who was at fault, the employer or the employee. In civil law, negligence must be established through litigation before any compensation is awarded.
  • For more information please review Section 440.02, Florida Statutes.

Are You An Independent Contractor Or An Employee

4 Things Contractors Need To Know Before Buying Workers

When it comes to workers compensation, it matters. Are you sure youre considered an independent contractor by the government? The classification of employees is usually determined by how independent you actually are.

  • Workers compensation is your employers obligation if the government considers you to be employee.
  • Workers compensation is your obligation if the government considers you an independent contractor.

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The Company Is Often Responsible For Paying Workers Compensation Claims Regardless Of Whether The Worker Has 1099 Status

Suppose an independent contractor was injured while working for a company. In many situations , the company is responsible for paying the claim through their workers compensation policy.

For example, here is the Oklahoma Workers Compensation Statute on the matter:

85A OK Stat § 85A-36 If a subcontractor fails to secure compensation required by the Administrative Workers’ Compensation Act, the prime contractor shall be liable for compensation to the employees of the subcontractor unless there is an intermediate subcontractor who has workers’ compensation coverage.

In other words, there is no benefit to the employing company from having an uninsured independent contractor, only additional risk.

Requiring independent contractors to carry their own workers compensation coverage takes employers off the hook for paying any claims because the responsibility now rests with the insurance company.

How Much Does Workers’ Compensation Insurance Cost

  • The cost of Workers’ Compensation insurance is based upon 3 primary factors: the payroll for the business, the type of work performed by the employees, and the individual employers claims history.
  • Premium discounts may also be available to employers. Two of the more common discounts include a 2% discount for a workplace safety program and a 5% discount for a drug free workplace program. Each of these programs must be renewed every year in order to receive the discount.

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Compensation Will Not Be Paid In Several Other Instances:

  • If the injury is caused by the employee’s willful intention to injure or kill himself or another
  • If the injury is caused primarily because the employee is intoxicated or under the influence of drugs
  • If the injury or death of the employee is covered by the Federal Employer’s Liability Act, the Longshore and Harbor Workers’ Compensation Act, or the Jones Act . For more information, please visit
  • For more information please review Section 440.09, Florida Statutes.

What If My Subcontractor Does Not Have Insurance

Workers’ comp and statements to insurance companies


A subcontractor doing work for your company, without their own Workers Comp coverage, can file a claim under your policy if theyre injured while working for you. The insurance company will charge you for this as if the 1099 payments made to the subcontractor were wages to your own employees.

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Is There Someone Who Can Help Me To Establish A Safety Plan For My Business

  • The University of South Florida Safety Florida Consultation Program has several services that are offered to Floridas small employers. Those services include helping to establish a Safety Plan free consultation program and the ability to check out training videos to provide safety training to your employees. For more information please visit their website at

Where To Get Workers Comp Insurance For Self

The best workers comp insurers have expertise in your industry and policies suited for solopreneurs and your business needs. We highlighted the following for self-employed workers comp recommendations. For a more detailed list of general workers comp providers read our article on the Best Workers Compensation Companies.

Insurance Carrier

The Hartford, one of the largest providers for commercial insurers in the nation, is the best choice for self-employed individuals who need coverage but are concerned about unexpected costs. Rather than paying an estimated premium based on inconsistent payrolls, The Hartford offers a pay-as-you-go plan that charges a premium based on your actual monthly payroll as you run your payroll.

It is also notorious for being able to write monoline workers comp insurance for businesses without requiring them to obtain other commercial coverages like general liability, commercial property, business owners package, professional liability, and management liability. Other carriers typically only will offer workers comp if the insured also purchases the other coverage unless the worker class codes are extremely low risk.

Theres also a return to work program that helps get injured employees back to work as soon as possible. Additionally, it offers a pay-as-you-go premium plan and a simplified workers comp audit process.

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Contractor Workers Comp Insurance In California Whats Covered

Contractor Workers Comp Insurance in California includes the following coverage:

  • Employees and the contractor who carries the policy who get hurt or sick because of work
  • Provides basic benefits, including medical care
  • Temporary disability benefits, permanent disability benefits
  • Supplemental job displacement benefits and a return-to-work supplement
  • Death benefits

For Contractor Workers Comp Insurance in California through BearStar Insurance Services, We set direct appointments with carriers and underwriters, meaning our specialists can often return quotes in the same day for Contractors Workers Comp Insurance. On top of this, we keep premiums low with our medical disability program.

Leveraging over 40 years of experience, BearStar Insurance agents have a deep understanding of what California business owners need and dont need when it comes to their insurance coverage. From general business and workers compensation to independent contractors and cybersecurity, we work with some of the best carriers in the industry to provide you with custom-fitted, comprehensive protection at the best possible price. We value the relationships we build with our clients fill out the form above to get a quote or to speak with your local agent.

To Meet The Conditions Of Your Contract

What workers

As a contractor, your clients arent usually required to carry workers comp for you: youre not on their payroll, so youre not classed as an employee.

However, some clients may expect you to have your own workers comp policy and ask to see your certificate of insurance before theyll sign a contract with you. Thats to protect themselves if youre injured while working for them and try to claim compensation.

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A Note To Contractors When Hiring

Depending on the state you live or work in, there are certain criteria that need to be met if someone is a 1099 contractor. The takeaway? If youre a contractor, be sure that those youre employing dont fall within the employee bucket, or else you might find yourself liable should you not have workers comp .

For instance, the IRS explains the Common Law Rules as follows.1 Evidence that supports a degree of control or independence is broken into three different categories:

Behavioral: Does the company control what the worker does and how they do their job ? Financial: Does the company control the business facets of the workers job? Type of relationship: Are the company and worker bound by written contracts? Is the work rendered a key part of the business?

While the above is a federal rule and not used in all cases, its something to note if you plan to continue working with other contractors and not taking out workers compensation insurance. As a good rule of thumb:

If the person is a W-2 employee, depending on your state, you might be legally required to take out a workers compensation insurance policy If the person is a 1099 employee, a workplace injury claim would typically be covered by a commercial general liability policy but if theyre classified the same as a W2 employee, you might need workers comp.

How Many Days Does The Employee Have To Re

  • During the 180 day period after written notification of a positive test result, the employee who has provided the specimen shall be permitted by the employer to have a portion of the specimen re-tested, at the employee’s expense, an Agency for Health Care Administration licensed or a USHHS certified laboratory of his or her choice.
  • For more information please review Sections 440.101& 440.102, Florida Statutes.

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