Do Freelancers Need Workers’ Compensation Insurance?

In recent years, more and more employers have been hiring freelancers and independent contractors. With the advanced technology available today, freelancers can utilize their specialized services to look for a job. Businesses employ independent contractors to keep costs down, but what happens if a freelancer is injured on the job?

Whether a worker is a regular employee or an independent contractor, their workers’ compensation cases are frequently disputed to learn about freelancers’ compensation insurance.

What does workers’ compensation cover?

A workers’ compensation policy will help if you get hurt on the job or experience a work-related illness. You can still get injured even if you’re not in a highly physical industry like content writing or photography. A workers’ compensation covers the following:

• Reimbursement for lost wages
• Protection from employee lawsuits
• Work-related sickness or injury medical costs
• Services needed to recover and return to work

When do freelancers need workers’ compensation?

California does not require a genuine independent contractor with no employees to carry workers’ compensation insurance. The word doing the work in that sentence is genuine. However, some self-employed individuals might buy a policy to:

To satisfy a contract requirement

Some businesses mandate their workers to have insurance policies, especially workers’ compensation insurance. With this, the company limits its liability, and businesses will be financially responsible when a worker is injured.

To cover medical bills after a work injury

Health plans commonly exclude injuries arising out of work, on the basis that workers compensation is the intended payer. A contractor with no workers compensation policy can therefore fall between the two.

Hiring subcontractors can change the answer. An uninsured subcontractor may be treated as your employee for workers compensation purposes, which is why certificates of insurance are collected before work starts rather than after.

How California decides who is actually a contractor

California applies the ABC test, codified in the Labor Code, and it presumes a worker is an employee unless all three conditions are met: the worker is free from the hiring entity’s control, performs work outside its usual course of business, and is customarily engaged in an independently established trade of the same nature. 

Calling someone a contractor does not settle it, and neither does a signed agreement. If the arrangement fails the test, the hiring business may face the exposure of an uninsured employee. 

What to check before you take the work

If you’re a freelancer or an independent contractor, it’s essential to look for policies that cover you. Protect yourself from medical costs and lost wages for work-related injuries by purchasing workers’ compensation insurance today!

At Schneiderman Insurance Agency, we walk through how the work is structured and where the exposure sits. Learn more about our products and services by calling our agency at (818) 322-4744. You can also contact the agency for a quote. Topics and coverage discussed in this article are not guaranteed, consult with your agents to determine what your policy does and does not cover.

Disclaimer

This article is provided by Schneiderman Insurance Agency for general informational purposes only. It is not legal, tax, financial, claims, or coverage advice. We are licensed insurance professionals, not attorneys, accountants, or financial advisors, and nothing here should be relied on as a substitute for advice from a qualified professional in those fields. This content is general in nature and is not a review of, or a recommendation for, any individual reader’s specific insurance needs, policies, or circumstances. Insurance coverage depends entirely on the specific terms, conditions, endorsements, exclusions, limits, underwriting eligibility, carrier, and facts of each situation, and the actual policy language always controls. We do not guarantee any coverage, pricing, eligibility, underwriting approval, or claim outcome. Reading this article does not create an agent-client relationship. To understand how these issues apply to your situation, please review your own policy and speak with a licensed insurance professional, and consult legal, tax, or financial advisors where appropriate.