Workers’ Compensation for Independent Contractors

Workers’ compensation insurance can help provide crucial protection for independent contractors, but it may not be suitable for everyone.

Do Independent Contractors Need Workers’ Compensation Insurance in North Carolina?

Independent contractors are not required by law to maintain workers’ compensation insurance.

North Carolina businesses with three or more employees must carry workers’ compensation insurance, including full-time, part-time and temporary workers. This requirement helps ensure that employees who suffer work-related injuries or illnesses can receive benefits such as medical treatment, disability compensation, partial wage replacement and vocational rehabilitation.

Employers required to provide workers’ compensation insurance but don’t do so can incur significant penalties. Some employers may be exempt from state workers’ compensation regulations, so it’s crucial to consult with insurance professionals for guidance. Unlike traditional employees, independent contractors are typically not covered by their clients’ workers’ compensation insurance policies.

Should Independent Contractors Buy Workers’ Compensation Insurance?

Independent contractors should carefully consider whether to purchase workers’ compensation insurance based on their circumstances and risk tolerance. Without appropriate coverage, they may not have access to benefits such as medical expenses, lost wages or disability compensation in the event of a work-related injury or illness.

While not legally required for independent contractors with no employees in many states, including North Carolina, carrying workers’ compensation insurance can offer financial security in the event of an unexpected injury or illness.

Factors to consider when deciding whether to purchase workers’ compensation insurance include the following:

• The nature of the work performed
• The level of risk involved
• The potential financial impact of a work-related injury

Independent contractors working in high-risk industries or performing hazardous tasks may find workers’ compensation insurance particularly beneficial.

Independent contractors should also assess their financial situation and ability to cover medical expenses and lost income out of pocket in case of a work-related injury. While workers’ compensation insurance premiums represent an additional expense, they may be outweighed by the potential cost savings and protection provided in the event of a claim.

Ultimately, purchasing workers’ compensation insurance should be based on a thorough evaluation of the risks and benefits involved. Independent contractors should consult with insurance professionals or legal advisors to assess their needs and explore options for obtaining appropriate coverage.

Contact Us

The Allgood Insurance team can help North Carolina independent contractors decide whether to purchase workers’ compensation insurance. Contact us today for a personalized workers’ compensation insurance quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.