Self employed workers comp
Self employed workers comp

clock February 14, 2020

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Self Employed Workers Comp: The Complete Guide

It’s nice to have labels for compartmentalizing ideas and making them easy to reference. the problem with labels is that they too often flatten a concept, depriving those same discussions of much-needed nuance. So it is with the often bandied term ‘gig economy’. 

Getting into freelance or gig work, you might think of yourself as a mercenary, selling your skills to the highest bidder. Sadly, most self-employed work ends up being regular work with fewer safety nets and more papers. Self-employed Worker’s Comp is something many haven’t thought about. 

The self-employed sector continues to grow and current projections indicate at-risk jobs top the list. Construction labor jobs, cleaning jobs, and child care are all career fields that lend themselves to a self-employed structure. Each of these also comes with associated risks of a job-related injury.

What should you, and people in self-employed fields do to protect your solo business?

Self-Employed Worker’s Comp Overview

Three issues need to be considered when looking into Worker’s Comp solutions.

First, you want to know the benefits gained. If you are going to be spending money on protection, it’s nice to know what is covered.

Second, what penalties exist for not being covered. Both of these differ somewhat state to state. In general, knowing the pros and cons helps with decision making.

Third, you might wonder what good Workman’s Comp does for you when operating out of the home. Fortunately, the law has rules for how on the job injuries are handled when the home and the job are the same.


Worker’s Comp adds a layer of protection against the possibility of a work-related injury leaving you unable to continue working. The self-employed variety works basically the same as the employer offered in terms of how a claim is processed and the options it offers. 

Coverage for lost wages, medical costs, and even permanent disability work the same. 

Changes come in how a claim is processed and where the funds come from. Depending on the state, the job type, and your expected earnings, you may or may not be able to get Worker’s Comp insurance.

In some states, a Worker’s Comp fund has been established and can cover more costs on top of, or in lieu of, insurance. 


Conversely, not having insurance comes with its own set of penalties and provisions

Typically, penalties are leveled against high-risk jobs where the odds are increases that a claim will need to be made at least once in the worker’s lifetime. Many of the penalties apply to companies with a set number of employees and don’t always apply to self-employed workers.

The bigger issue for the self-employed is the ability to contract work. In industries such as construction, it is almost impossible to work on a site without some forms of insurance in place. Even if being sub-contracted by a larger firm, you have to show proof of insurance. 

Even so, if you are injured on a job site while working as a contractor, a claim may be made against the contracting entity that you are working for. This comes down to a variety of factors. 

Defining Job Duties

The first factor that determines who pays for a Worker’s Comp claim is in the definition of job duties. 

Job duties are those specifically related to performing task for the contracting entity or client. These come into a reasonability test for the most part. A driver injured while following rules and representing a company would be covered.

The same driver, done for the day and headed home, might not be. Some precedent outlines that events such as breaks or meals, the kind that would be had at any workplace, are still considered ‘work time’ and would then be held under a Worker’s Comp claim.


For those working out of the home, the workplace is an agreed-upon area presented in some form of writing. For a home office, this applies to the area of the office itself, the area that you would withhold on taxes. 

The pathway to break areas, such as your own kitchen, also count as part of the workplace in the same way. Traveling to the backyard to check on a weird noise while on ‘work time’ wouldn’t be covered.

What counts as a workplace and what counts as a job duty differ wildly from one type of self-employed business to the next and it behooves you to have contracts for your work in writing if only to outline what is and isn’t covered under this type of protection. 


Workplace equipment is also protected in some instances. The difference between when Worker’s Compensation vs employer’s liability comes into play depends on how the equipment is used.

Filing for a repetitive stress injury at a home office computer could be determined one way or the other if the same machine is also used for after-hours work. The court would decide on the percentage of personal to work use and likely award damages based on the comparative fault.

Damage to the equipment itself also comes down to how it was being used. Fro the example of a driver above, damages to the car in the commission of carrying a passenger would be covered, damage on the weekend driving up the coast would not. 

Get in the Know

With so many risks and unknowns waiting in the wings, getting self-employed Worker’s Comp insurance makes sense. It’s well worth the endeavor of looking into even in the early days of contracting work. 

Check your best options by state and get a quote today

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