Is An Employer Covered Under Workers Compensation Insurance?

As an employer, you have a legal responsibility to provide your employees with workers compensation insurance in the event they are injured on the job and wind up unable to come to work. You are generally not required to include yourself on that policy, but you can include yourself if you'd like to.

The reasoning behind this is easy enough to explain: In matters of insurance, the law only tends to step in when it comes to our responsibility to other people. That your employees don't have to worry about paying their bills should they be injured in the line of duty is the least that they should be able to expect. This is the same rational behind why we have auto insurance liability laws — to ensure that the other party's needs are met in the event of an accident.

Typically, these requirements do not extend to insurance we place on ourselves and our own property. It's not a great idea to go without home insurance, but it's your right to buy or forego home insurance at your discretion. Likewise, you are free to cover yourself on your workers compensation insurance policy as you see fit.

When Is Workers Compensation Insurance Required?

Before hiring a single employee, you need to have a workers compensation insurance plan in place in every state except Texas. Even if you're just hiring an assistant, you need to make sure that they are covered.

Note that this does not extend to hired hands — such as freelancers, contractors and consultants. Anyone working on a contract basis or through an agency are going to be bringing their own insurance with them. This can either be purchased by themselves or through their own employer or agency.

You might be required to cover yourself on your workers compensation plan not by law, but by agreement. If you're working with a partner or a client who insists upon it, then having this coverage means abiding by the terms of the agreement.

If you're ready to start hiring fulltime employees, you'll want to call your business insurance agent and talk about workers compensation. But, unless someone you're working with requires it, you don't have to worry about paying to cover yourself.

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