The need to have workers’ compensation insurance may be obvious to most small businesses with several employees across Florida. However, if you don’t have any employees yet, you may wonder if coverage for a workplace injury or illness is important or required by law. The truth is that workers’ comp is only necessary when you have a certain number of employees. However, there are many scenarios in which you may need coverage to win contracts and grow your business.
Here are four different reasons why you need to carry workers’ compensation insurance even if you’re a sole proprietor.
1. As an Independent Contractor Without Employees
In most states, small businesses without employees don’t require workers’ comp policies. Within this category are sole proprietors and independent contractors that have no permanent employees. Florida law doesn’t require these businesses to file an exemption either. In this state, sole proprietors and their business partners are not “employees.” However, if you operate in other states, you may have to file for an exemption if you choose not to carry workers’ comp insurance.
2. You Need workers’ compensation insurance to Do Business
Any shrewd business person looks to reduce their third-party injury liability risk to the lowest level possible. This is why a potential client, such as a general contractor, may require you to obtain workers’ compensation insurance coverage before hiring you. They’d be protecting themselves from liability in case you got injured while doing some work for them. Their insurance could deny the claim because you’re legally not their employee, forcing them to pay for your treatment out of pocket. Don’t be surprised if a client asks you to show your certificate of insurance (COI) to give you a contract. It’s perfectly legal!
3. You’re Looking to Protect Yourself in Case of Workplace Injury
Purchasing workers’ comp insurance is investing in your own protection in case you’re injured on the job. It’s the most sensible thing to do if you operate in high-risk industries like construction. The policy would pay for your treatment, protecting your sole-proprietorship from unnecessary financial loss. Recall that most personal health plans don’t cover workplace injuries or illnesses. Even if your health insurer covered such an event, they wouldn’t compensate you for lost wages as you seek treatment and recover at home. This is another scenario where workers’ comp insurance is indispensable, including for small businesses without any employees.
4. You Usually Hire Sole Proprietors
Just because you don’t have any full-time or part-time employees doesn’t mean you can’t outsource professional services. You may be a sole business owner, but you can sometimes engage an independent contractor or a leased employee for temporary work. In these scenarios, you may be required to carry insurance for on-the-job injuries. The policy would cover the contractors for injuries while doing any contractual work for you. Note that, even when coverage isn’t mandatory in your state, you could be held liable for injuries that anyone suffers while working for you. If you’re unwilling to assume this liability risk in such a scenario, then at least require anyone you hire to carry the necessary insurance protection.
Are you a small business or sole proprietorship looking for workers’ comp in Sarasota, Florida? Contact us today at Atlas Insurance for help creating the right coverage program for your line of work. We can customize your insurance plan to suit your budget and unique needs!