Do You Need Contract Labor Workers Compensation Coverage?


Most businesses assume that worker’s compensation programs are only necessary for the workers on direct payroll. In many cases they would be right, but there are exceptions that make independent contractors provided with 1099s count as employees for the purposes of employer liability and worker’s compensation. The test for whether a contractor should be included in your policy has three parts.

  1. Definitions of the word employee within state worker’s compensation laws
  2. Definitions of independent contractor under the same body of laws
  3. A review of whether or not a contract laborer has been misclassified according to said laws

The exact rules for when you must have contract labor workers compensation are dictated by those state laws, so businesses operating in multiple jurisdictions need to understand the differences in risk management between their sites.

Shop for Your Contract Labor Worker’s Comp Policy

Finding the right worker’s compensation does not have to be difficult. If you assess the situation and find that you do have to cover some or all of your 1099 contractors under your state’s worker’s compensation laws, just find a program designed to provide coverage that includes contract laborers. If you are not sure yourself, the easiest way to know is to contact those programs for a quote. They can interview you about your labor makeup and provide insight into whether you need this coverage or not.

This post was written by , posted on February 21, 2022 Monday at 8:00 pm