self employed workers comp

Do I Need To Have Workers Comp Insurance?

Owning your own business and/or being self-employed involves assuming risk. One way to protect yourself against some of that risk is to have workers’ compensation insurance. Workers’ compensation insurance can help with medical bills and wage replacement if you are injured at work.

What Does the Law Say About Carrying Workers’ Compensation Insurance?

In Iowa, a sole proprietor who is actively engaged in the proprietor’s business on a substantially full-time basis is exempt from workers’ compensation insurance.

So in most cases in Iowa, if you’re self-employed, workers’ compensation insurance isn’t required, except if you have any staff. Even if you only have one individual working for you, it’s still the law in many states, including Iowa, to carry workers’ compensation insurance.

Penalties can be serious for not carrying workers’ compensation insurance in Iowa. Willingly and knowingly failing to carry workers’ compensation insurance is a Class D felony which is punishable by up to five years imprisonment and a fine between $750 and $7,500. Outside of Iowa, be sure to check with your states Department of Labor to see what is required in your state regarding workers’ compensation insurance coverage. If your business is in Iowa, but somebody works for you in another state, you want to check that your company policies are in agreement with the standards in that state as well.

Even though workers’ compensation insurance is discretionary if you have no staff, it still may be a good idea.

Some Reasons to Have Self-Employed Workers’ Comp Insurance:

  • If you work in a high-risk industry, it is a good idea to have workers’ compensation insurance to protect yourself from expensive medical bills and lost wages.
  • If you get injured working and have workers’ compensation insurance, you will not have to use your health care coverage to take care of your medical expenses. This may eliminate co-pays, out-of-pocket costs, and maximum payment restrictions your health insurance may have.
  • Workers’ compensation insurance will cover a percentage of your salary for time off work due to your work-related injury, which standard health insurance does not do.
  • It protects your business from fines if workers’ compensation insurance is required in your state.
  • It can provide death benefits should you die from your injury.
  • It can cover transportation costs to get to doctor appointments etc.

If you are a self-employed business owner, independent contractor, or someone who is looking to start a business venture make sure you have workers’ compensation insurance to cover you and your business.

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