Everyone knows that employers are required to provide their employees with some type of workers’ compensation insurance. Sole proprietors and independent contractors can also receive workers’ compensation insurance if they choose to do so. While they have the option to “opt-out” or turn it down, purchasing a workers’ compensation policy may be in their best interest. Every business is different in terms of potential risk. It is up to the business owner to decide how much and what types of insurance they want to carry on themselves and their business.
Who Needs Workers’ Compensation Insurance?
The fact is, everyone can benefit from having a workers’ compensation policy, even those who are self-employed. The concept behind workers’ compensation is to protect the employee from financial loss if they are ever injured while on the job. This type of insurance is especially beneficial for business owners who may not have any other source of income. Having workers’ compensation insurance ensures that their medical needs are met, and they have the financial means to care for their family until they are physically able to return to work.
Protecting Yourself and Your Livelihood
If you are a sole proprietor or independent contractor, it is up to you to make sure you have the coverage you need in the event of an accident. As a sole proprietor that works on your own, it is up to you to make sure you are as safe as possible at all times. Accidents may still happen. Also, the same is true for an independent contractor. With an independent contractor, however, the company they are working through may be obligated to provide coverage if an accident occurs on their company’s time and property. Having workers’ comp insurance guarantees coverage either way.
The Ability to Opt-Out of Workers’ Comp Insurance
A business owner has the option to “opt-out” of providing workers’ comp policies. In order for a business owner to opt-out of carrying workers’ comp insurance, they must file an exemption form with the state. Because most states require businesses of any size and type to provide workers’ comp insurance for their employees, filing an exemption must be completed in a timely fashion in order to remain in compliance with state guidelines. However, it is essential that the business owner goes over all of their options prior to completing and filing the exemption paperwork.
Decide What Is Best for You
As a business owner, it is important that you decide what option is best for you. With certain types of businesses, the risk of a work-related injury is minimal, making the cost of workers’ compensation an expense you may not be able to afford. Other types of work, however, may involve an increased risk making the need for workers’ compensation a necessity instead of an extravagance. If you are still unsure after you have weighed both options, call your insurance agent and set up an appointment to go over your questions and concerns. Once you have the information you need, you can make your final decision to purchase a workers’ comp policy or opt-out.
At Udell Family Insurance, each agent is specialized in assisting business owners who are sole proprietors or independent contractors to make the right decision when it comes to purchasing a workers’ compensation policy for themselves and their company. We offer sound advice that business owners can rely on when making such an important decision.