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Q: I left my job to begin my own company as an independent contractor - am I required to carry workers’ compensation insurance?

A:

First of all, congratulations on beginning such an exciting journey. Being self-employed is a liberating and rewarding experience, and it takes a lot of work and courage to branch out on your own. That being said, the same journey is one that can be full of challenges and obstacles, and you will be an expert in many fields by the time your business gets its feet on the ground!

Workers’ compensation insurance is required for employers in Pennsylvania as a means of protecting both employers and employees in the event of a workplace injury or accident. Employees are taken care of medically and financially as they heal, and employers enjoy protection from lawsuits brought by injured employees. Since you are technically your own employer now, wouldn’t it stand to reason that you need to carry workers’ compensation insurance?

Not necessarily, says Pennsylvania. If you have begun your own company and have employees, you will need to carry workers’ compensation insurance to protect your workers and your business from risk. It sounds as though you are on your own as a sole proprietor, however, so the answer becomes a solid “sort of, but not really” when you are self-employed with no employees of your own.

When you are hired to complete a job, the person hiring you will likely have great interest in your insurance situation. As a sole proprietor in Pennsylvania, you are not required to carry workers’ compensation insurance. Be aware, however, that if you are hired by another contractor or employer (as is common in the construction business), that contractor may be required to show their own insurer proof of your coverage, so be sure you carry some form of insurance to protect yourself.

The laws of self-employment and sole-proprietorship can be quite complex, and if you have been injured on the job, it may not be simple to navigate the process of getting the coverage you need. To learn more about your requirements and rights as an injured sole proprietor in Pennsylvania, reach out to us today via live chat or by filling out our online contact form.

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