Cotney Blogs

Do You Need Workers’ Comp Insurance?

If you own a small business, you may wonder if you are required to carry workers’ compensation insurance. After all, if the company is just you and one other worker or family member, is it necessary? Below are answers to those and other questions.

Size and Location of Your Company

Workers’ compensation insurance is regulated and mandated on a state-by-state basis. Most states require companies to carry worker’s comp insurance if they have part-time or full-time employees. Some states stipulate a minimum of three employees, while others require this insurance for only one employee. In most cases, workers’ comp is optional for private employers in Texas. As for sole proprietors, they are not required to carry workers’ comp insurance.

Type of Business

However, even as a sole proprietor, you may want to carry workers’ comp insurance if you work in a high-risk environment. High-risk industries include construction, landscaping, and many others. If you have an accident at your worksite, the policy will cover your medical expenses.

Your Customers

If you are doing work for clients at their sites, they may require you to have workers’ comp insurance. That way, if you are hurt on the job, your policy covers the injury, and they are not liable.

Using Subcontractors

Depending on the project, if you use subcontractors, you may need to carry workers’ comp insurance in case they are injured at work. However, if they are truly independent contractors, it is best for them to carry their own workers’ comp policy.

Final Advice

Having workers’ compensation insurance may help provide you with peace of mind. After all, you want to protect your business, and as a small business owner, you are likely its most critical asset. However, you may find it challenging to get a policy just for yourself. If that is the case, check to see if your state offers a workers’ comp fund.

If you have other questions about workers’ comp insurance benefits and requirements, talk to legal counsel. The experienced employment attorneys at Cotney can review your situation and help you make the right decision for your business.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.