How to Claim Workers Comp Benefits If You’re Self-Employed

A self employed person with workers compensation insurance.

Though workers comp rules vary per state, almost all require employers to provide workers comp insurance for their employees. But self-employed individuals are usually left to fend for themselves.

So if you’re a business owner or an independent contractor, chances are you don’t have workers comp coverage. This might not matter much for now but it will if you get hurt on the job. That’s why many self-employed people wonder if they can claim workers compensation for work-related injuries or illnesses.

The short answer is, yes. A self-employed worker may file a workers’ compensation claim depending on the circumstances of their injury. But they may have a hard time doing so without worker’s compensation insurance coverage.

If you’re self-employed and were hurt on the job, here’s what you need to know about claiming self-employed workers comp benefits.

Why You Should Carry Workers Compensation Insurance

Workers’ compensation is designed to protect people from financial distress caused by work-related injury and illness. It’s an assurance that even if you get injured and can’t work, you’ll still be able to meet your living expenses and pay for medical bills.

If you’re a business owner with no employees, a work-related injury can mean temporarily closing your business. As for independent contractors, getting injured can lead to lost contracts and even lawsuits. If you don’t have workers’ comp insurance, you’re basically putting yourself at risk of financial ruin. You won’t get any help with medical expenses or receive compensation for lost wages.

Even if you already have personal or business insurance, they may not cover work-related injuries. So getting workers’ compensation insurance on top of that is always a good idea. With enough funds for medical expenses and lost wages, it won’t be that hard to keep your business afloat or keep to contract deadlines while you’re recovering from your injuries.

Getting Workers Comp Insurance If You’re Self-Employed

In general, workers compensation insurance for independent contractors and business owners is optional. But some states require individuals in high-risk industries to get one even if they don’t have anyone working for them.

In Florida, for example, sole proprietors and partners in the construction industry need to have workers comp coverage. Otherwise, they can’t get permits and may even have to pay penalties. They are not eligible for exemption unlike their counterparts in non-construction industries. California workers’ comp laws also require every self-employed worker to get workers’ compensation insurance for themselves.

Some clients may also require contractors to get workers comp coverage before signing a contract with them. In fact, independent contractors often find it easier to get hired in projects when they already have workers compensation coverage.

Can You Buy Workers Comp Insurance For Yourself?

Definitely! Most insurance companies offer workers’ compensation insurance for the self-employed. Some states also have a state-sponsored Workers Compensation Fund which allows coverage for individual contractors.

Obviously, the premium varies per person. How much you’ll pay depends on certain factors like:

  • where you live
  • the kind of work you do
  • your insurance claims history
  • your income

Unsurprisingly, the riskier your work is, the higher the premium you’ll have to pay. If you’ve claimed workers compensation benefits before, it can also add up to your business insurance cost. And since lost wages compensation is based on a portion of your earnings, insurance providers also take your average earnings into account.

Ghost Policies

In states where workers comp insurance is mandatory even for self-employed contractors, some business owners are tempted to get a ghost policy.

A workers comp ghost policy is specifically designed for contractors who need proof of workers comp coverage to comply with state policies or client requests. This is especially common for those working in a high-risk industry. Because it’s only for compliance purposes, it’s much cheaper than an actual workers compensation policy. But it also offers no real insurance coverage.

So if you’re planning on getting one, you might want to think about it thoroughly, especially if you’re working in a high-risk industry. Since the insurance covers nothing, you won’t be able to get anything at all if you’re injured on the job. Plus, your client may have to pay for your medical bills which can raise the cost of workers comp insurance for them. Because of this, they might never want to work with you again.

A self employed person with workers compensation insurance.

Claiming Workers Comp Benefits If You’re Self-Employed

Whether you’re employed or self-employed, the process of claiming workers comp benefits is pretty similar. Except, if you’re employed, you’ll typically have to inform your employer first about your injury. Your employer is then required to report it to your insurance provider. When you’re self-employed, however, you will have to report any injury and illness directly to your insurance provider.

But after you’ve reported your injury, the process is pretty much the same. You will have to produce evidence of your injury or illness. This means you need to submit medical records, doctor’s reports, and any other document that will prove you were hurt at work. You may also have to produce witnesses to support your claim.

Your insurance provider will then use those pieces of evidence to verify your claim. They may also send a workers comp investigator to follow you and make sure that you really are injured. If there’s doubt about your claim, they may deny your benefits. In fact, many workers comp claims are denied at the initial application stage.

If your claim is denied, you can still make an appeal. You will then go through a negotiation and mediation process. If you can’t agree on a settlement, you may have to take your case to court. Depending on the circumstances of your injury, the entire process can take months or even years.

What Workers Comp Benefits Can You Claim?

As a self-employed individual, you are entitled to the same type of workers comp benefits as employed individuals. This means you’re entitled to medical benefits, lost wages benefits, and other benefits covered by workers comp policies in your state. Depending on your injury, you can claim up to 80% of your average weekly earnings from before you got injured. To make sure, check your state’s workers compensation laws or talk to your workers’ comp attorney.

Can You Hold Your Client Liable For Your Injury?

When employees get hurt on the job, they can usually sue their employers for compensation. But such an option is not available for self-employed individuals. You’re basically your own boss and it’s highly unlikely that you’ll take yourself to court.

So who can you hold liable in case of a work-related injury?

It depends. In some states like Florida, you cannot hold your client liable for any work-related injury if they’ve fully disclosed the hazards of the job. Meaning, you took on the job knowing full well of the risks. So the blame falls on no one but you.

However, this isn’t absolute. The law provides that you can still sue your client for compensation if they:

  • exercise direct control in the works that you do (this essentially makes them your employer even if they claim otherwise)
  • negligently approves the dangerous working conditions

If your injury is due to your own negligence, that doesn’t necessarily mean you can’t claim workers comp from your insurance provider. Some states allow you to file workers’ compensation claims no matter whose fault the injury is, as long as it’s work-related.

How to Claim Benefits If You Have No Workers Comp Insurance Coverage

If you already have workers’ compensation insurance, you’ll most likely get benefits if you get injured on the job. But even if you don’t, it’s still possible to claim workers comp benefits.

As mentioned earlier, you can sue for compensation if your client has direct control of the work that you do. If you don’t have the freedom to do your job your way, then you’re not a contractor but an employee. As such, they should provide you with workers comp coverage.

It’s also not unheard of for employers to erroneously classify employees as individual contractors to get away with employee benefits. So most states put in place sanctions for erring employers. If you can prove that you are indeed an employee rather than a contractor, you have a higher chance of getting workers’ comp benefits. Your employer may even have to face steep penalties.

But proving such can be difficult, time-consuming, and terribly exhausting especially if you’re still recovering from an injury. Hiring an experienced workers’ compensation lawyer like Victor Malca can take this burden off you. He has already helped thousands of injured workers in Florida fight for their benefits. He can help you get the benefits you deserve too. Call us now for a free consultation.

VICTOR MALCA – Florida Workers Compensation & Social Security Disability Attorney

Victor Malca P.A. has over 27 years of litigation experience in Workers Compensation and Social Security Disability lawsuits. His experience and continued success when fighting for his clients puts him among the most trusted workers’ compensation attorney’s in Florida. He specializes in representing injured workers on compensation benefit cases and disabled individuals claiming lost social security disability benefits.

Book a free consultation today. Our unwavering advocacy for employee rights and privileges are recognized by our past clients across South Florida.

About The Author

Judy Ponio is a writer and editor for the Victor Malca Law P.A. website and blog. She enjoys helping people in need with questions about social security disability and workers compensation law. She has a passion for helping those in need and the elderly with accurate legal information that can make a positive difference in their lives.