In 2021, private employers reported 2.6 million nonfatal job injuries and illnesses. Of that number, 2.2 million, or nearly 85%, were injuries.
Those figures show just how hazardous workplaces can be. Even worse, job injuries and illnesses cost the economy billions of dollars. In 2020 alone, work injuries cost the U.S. a whopping $163.9 billion.
Fortunately, workers’ compensation insurance can help mitigate such costs.
In this guide, we’ll specifically cover workers’ comp insurance for self-employed freelancers. Keep reading to learn what it is, if it’s a legal requirement, and why you may need it.
What Is Workers’ Compensation Insurance?
Workers’ comp is insurance for job-related illnesses and injuries. It helps cover the medical costs and some lost wages of employees who get ill or injured on the job.
Workers’ comp is often a legal requirement in a typical employer-to-employee relationship. In this case, the former is responsible for purchasing workers’ comp.
Texas is the only state not mandating employers to purchase workers’ comp. All other states require it for most employers and businesses.
While workers’ comp may seem beneficial only to employees, it also benefits employers. For example, it protects employers against employee liability claims.
Is Workers’ Comp Insurance for Self-Employed Freelancers Mandatory?
Self employed workers comp insurance isn’t typically required for freelancers. However, it’s still wise to get coverage to protect yourself from the costs of getting ill or injured on the job. One reason is that health insurers often don’t provide coverage in such instances.
Workers’ comp for self-employed individuals like you can help by:
- Covering treatment costs of job-related illnesses and injuries
- Replacing some of your lost wages if you can’t go to work
- Providing disability benefits if you sustain severe injuries or illnesses
Always remember that treating injuries can cost hundreds or even thousands of dollars. For example, a study published in 2021 studied the 1-year costs of nonfatal injuries. The researchers found the average to be about $6,620, with the typical range being between $1,698 and $80,172.
So if you go without workers’ comp, you risk shouldering such exorbitant costs.
When Else Do You Need Self-Employed Workers’ Comp?
Companies that contract with freelancers may also require workers’ comp insurance. Thus, you may miss work opportunities if you don’t have coverage.
Some states may also require workers’ comp insurance for independent contractors.
For instance, suppose you’re a freelancer photographer in Hawaii. Let’s also say you hire an assistant for every job or project contract you get.
In the scenario above, Hawaii law may require you to purchase workers’ comp for your assistant. It covers and protects your part-time worker if they get injured while working for you.
You, in turn, don’t have to worry about paying for their medical costs or recovery. You also don’t have to worry about them suing you for liabilities.
Get Insured Today
Now you know workers’ comp insurance for self-employed freelancers is usually not mandatory. However, even if your state law doesn’t require you to purchase it, you should still consider doing so. That way, you can protect yourself from the high costs of job injuries and illnesses.
So, why not shop around for worker’s comp as early as today? The sooner you do, the sooner you can insure yourself.