In 2021, many people are finding themselves at a crossroads in regards to their employment status due to not wanting to get vaccinated against COVID-19. Some have considered taking the situation into their own hands by quitting their jobs and working for themselves instead of for an employer. If this sounds like you and you feel it's the push you've needed to become an independent contractor, it's a good idea to protect yourself with workers compensation insurance to cover yourself in case of a work-related injury or illness.

Here's why and what you need to do to get the right workers compensation insurance coverage for your particular needs. 

Most Medical Insurance Policies Do Not Cover Workplace Injuries

A lot of people don't realize this, but most medical insurance policies do not cover workplace injuries. Many people who are self-employed or independent contractors don't consider getting workers compensation insurance because it's not a requirement for them to do so in many states, and they falsely believe their medical insurance will cover any injuries they may have while on the job. 

Therefore, not only would you not be able to work if you're injured while on the job, you would need to pay out of pocket for health care due to the injuries. It becomes a double-whammy that can easily lead to long-term financial hardship. Don't make this mistake. Find out whether or not your medical insurance covers work-related injuries and how much that coverage is, if so. Doing this will help you determine how much coverage to have in your workers compensation insurance policy for bodily injury by a workplace accident and/or disease.

Many Contracts Require Workers Compensation Insurance

Another thing many independent contractors don't realize at first is that many of the businesses and government agencies require everyone they contract with to have their own workers compensation insurance coverage, particularly for work done in industries where safety and risks are a significant concern.

By already having a good workers compensation insurance policy for yourself, you'll already meet that particular requirement, which could put you in front of your competitors who don't realize this little trade secret yet. Not only does it show that you take your work seriously, but it also shows that you plan ahead and mitigate risks. The costs of your workers compensation insurance premiums could easily be well worth the expense when you land significant contracts. 

Prevent Misclassification as an Employee

Having workers compensation insurance for yourself can also help prevent misclassification as an employee of a person or company you perform work for in the future as a contractor or subcontractor. This is important given that your stance on the COVID vaccine and not wanting to be required to be vaccinated as an employee. You can learn more about the differences between the designations of employee vs contractor on the IRS.gov website. 

If you will have sub-contractors help you do some work, you will want to make sure you understand your state's laws and requirements for workers compensation insurance on subcontractors as well as to make sure you don't accidentally designate yourself as an employer instead of someone who subcontracts work to other contractors. The reason for this is so you don't end up with hefty fees and potential fines for not paying employer taxes, which could happen if you misclassify yourself due to treating your sub-contractor as an employee instead of as a sub-contractor. 

In conclusion, when you meet with the commercial insurance agent regarding starting your workers compensation insurance coverage policy, you'll want to consider the above information so you can determine how much coverage you should have to protect yourself in case you or a subcontractor are injured while on the job. 

Talk to an insurance provider for more info.