Workers’ Compensation protects businesses and contractors by providing wages and medical treatment if the worker is injured while working.
Yet independent contractors do not always invest in Workers’ Compensation insurance to protect themselves.
Consequences of Injuries
An independent contractor without Workers’ Compensation that is hurt on the job can experience devastating consequences. These injured workers face an inability to work, financial burdens, plus mental anguish and stress, which can be ruinous for them and their family. Lives and businesses can be lost.
This could also be devastating for a homeowner if an independent contractor working on their property gets injured. In this case, the homeowner may be partially liable.
Unlicensed contractors put everyone at risk; not only themselves, but their clients and subs that they hire on a freelance basis. Independent contractors and their employers should always verify their insurance before any work starts.
Business owners have policies for their regular employees, but this does not cover freelancers who use 1099s. Do the owners always check to see if their subcontracted employees have valid Worker’s Compensation insurance? Not always. If a work-related accident involving one of these employees occurs, and they are not covered, both parties are left in dreadful positions. Insurance companies can charge business owners costly penalties for using uninsured subcontractors that are injured on their job sites.
The Value of Workers’ Compensation Insurance
Investing in Workers’ Compensation should not be an option for independent contractors. But the reality is that these kinds of policies can be costly and difficult to obtain. Consequently, many are not able to afford this coverage, or just do not know how to get it.
It can be especially challenging for a self-employed individual or independent worker to get Workers’ Compensation for themselves. They often get turned down by insurance companies who feel that the investment in an independent policy is not worthwhile. This is compounded by the fact that large construction companies may not hire subcontractors that are not fully covered.