Workers’ compensation insurance can pay for the medical bills and lost wages that an employee incurs when they are injured or fall sick at work. As in all other states, California requires employers to have this coverage for their workforce.
Nevertheless, do you need workers’ comp insurance if you’re a sole proprietorship with no employees? Read on to find out.
Do You Need Workers Comp Insurance If You Have No Workers?
You don’t have to buy this coverage if you have no employees. In all states, workers’ comp policies are usually required for businesses with a certain number of employees or people working for them.
However, operating a sole proprietorship without workers’ comp insurance may prove costly if you’re injured on the job. It’s worth considering even if you have no employees.
Two Reasons Why You Need Workers’ Comp
Having workers’ compensation insurance in Calabasas, CA can help you in ways like:
- Covers the Cost of Work-Related Injuries or Illnesses
If you’re hurt on the job, you can’t always count on your health insurance plan to cover your medical bills. However, a workers’ comp policy can cover your medical expenses after getting injured or falling sick on the job. These policies have no limits, meaning that you’re fully covered, except for the deductible you have to pay.
Keep in mind that certain on-the-job injuries may require you to take some time off work to seek treatment and recover. If you have no employee, you may have to shut down business operations until you have fully recovered. This might mean getting by without a steady income, which can be tough for many.
If you need some time off after getting injured at work, this policy can compensate you for about two-thirds of your lost wages. This money isn’t taxed at all.
With adequate workers’ comp insurance, you can avoid selling personal or business assets to meet unforeseen financial liabilities.
- Contractors Often Require Workers’ Comp to Get Work
If you are involved in contract work, you’ll often require workers’ compensation for employees to acquire more business. Most general contractors or other companies won’t hire you unless you’re covered for on-the-job injuries. That’s because, in many states, any company that employs you without proof that you have your own workers’ comp policy may bear the cost of your liabilities in any on-the-job incident. To protect themselves, clients will usually request to see a Certificate of Insurance (COI) before hiring you.
Would You Need Workers’ Comp If You Hired Contractors Instead of Employees?
Depending on your business location, you may not need workers’ comp insurance for contractors or leased employees. However, many states require you to buy the policy for anyone that does any work on your behalf.
Where the law doesn’t require you to cover contract workers or subcontractors, you may still be held liable if any of the uncovered professionals or contractors got injured while working for you. That’s why you should require any subcontractors or contract personnel to have their own insurance protection before hiring them. Hiring contractors without workers’ comp insurance may require you to spend more on your own cover to fully protect your company.
Be sure to have your own cover too. It can be your safety net in case your subcontractor isn’t insured for workers’ injuries or illnesses.
Having workers’ compensation in Calabasas, CA is for your own good even if you have no employees. Would you like to learn more about insuring yourself against illness or injury on the job? If so, get in touch with the team at Burton A. Harris Insurance Agency today. We’re eager to help address your small business insurance needs.