Workers' Compensation Insurance for Freelancers?

Hard hats usually aren't available for freelancers.

This could be one of the most important business insurance decisions a freelancer will ever make.

Workers' compensation insurance isn't just for employees, self-employed individuals and freelancers can benefit too. Freelancers or self-employed persons wondering whether or not they might qualify or even be covered with workers' compensation insurance, discover the answer here. 

Today, it seems just about everyone freelances; that is, sells their labor outside of the protection and comfort of a regular employer. According to several studies, more than 33% of American workers freelance. And that that number is growing.

The Cost and Rewards of Freelancing

Freelancing has its benefits. Besides enjoying the freedom and flexibility that freelance work affords, many freelancers enjoy the added benefit of pursuing a passion. 

As rewarding as freelancing can be, some parts of it such as work and income security are scary. Freelancers literally are their work. As more and more people enter the world of freelance, the need for business insurance such as workers' compensation is real.

What Happens If a Freelancer Can't Produce Due to an On-the-Job Accident or Injury?

That depends. 

If he or she is classified as a regular employer, they could rest easily and collect workers' compensation as they recover from their injuries. But getting hurt on the job is more complicated than that for the freelancer.

What Every Freelancer and Small Business Owner Should Know about Workers' Compensation Insurance

There are many types of freelancers, from independent subcontractors, writers, doctors, lawyers, and customer service professionals, to work-at-home moms and accountants. And there are just as many, if not more work arrangements. For example, in some states, a principal contractor is required to provide workers' compensation insurance for subcontractors. Other states require subcontractors to carry their own workers' compensation insurance policies.

Laws, Labor and Loss

Workers' compensation laws vary by state, especially for freelancers, some states such as Florida have specific laws for freelancers. (You can find individual state laws here.) Florida divides its workers' compensation coverage requirements by industry. 

"Decisions, decisions, decisions..."

Florida Workers' Compensation Insurance Law

In Florida, sole proprietors, partners and corporate officers working in the construction industry are required to have workers' compensation insurance. They are considered employees. Likewise anyone that employs more than one person full time within the construction industry must obtain workers' compensation coverage to comply with Florida laws. Some workers including sub-contractors may be exempt. Freelancers within the construction industry should consult Florida's Division of Workers' Compensation for more details. 

Florida freelancers that do not work in the construction or agricultural industries and employ less than four people have two options: 

1. Do nothing, 
2. Or elect to be classified as an employee

In order to be classified as an employee, they must submit a Notice of Election of Coverage form to the Florida Division of Workers' Compensation.

"Dang, I hope he doesn't get hurt. I'm staying back here."

What Does Workers' Compensation Cover?

Worker's compensation insurance provides real benefits for an injured worker. If a worker becomes injured or disabled on the job, he will receive a portion of his income during his disability. Medical expenses incurred during the disability are also covered under a worker's compensation policy. Beneficiaries of a worker that dies as a result of a workplace injury may also receive compensation from a policy.

How to Determine the Need for Workers' Compensation Insurance

Freelancers that can benefit from a workers compensation insurance policy share similar characteristics. Below are a few examples:

• Has no other source of income outside of work
• Are the sole financial providers
• Work makes him prone to accidents or injuries
• Is in debt
• Has a hazardous job
  

Any freelancer concerned about their income if they become injured while at work should look into workers' compensation insurance protection. Rates for this valuable coverage vary by individual states, job hazard and classification, claim and loss history. 

How Much Does a Workers' Compensation Policy Cost?

The minimum annual premium for a worker classified as a clerical teleworker in Georgia can be low as $181. That's a low price to pay for business insurance, especially when it comes to protecting a very important asset: income. 

Photo Credits: Jay Baker
Dmitry Marochko 
Rob Campbell
David Martyn Hunt