How Important Is Workers’ Compensation Insurance?

Being self-employed or working for a company is highly similar due to various different reasons. One of them is the necessity of having security. Workers’ compensation is a type of insurance that will cover the employee if injuries happen while on the job. The current state of the economy is tricky and unfortunately, there are many different business owners that do all that they can in order to cut costs. This can include eliminating this type of insurance because of the associated costs.

We need to understand that there are many states in the US and many countries in the world where not having workers’ compensation insurance is illegal. Even if it is not, we can easily highlight the fact that it is not wise.

In case you were not aware of this, there is a specialization in law that deals exactly with this type of insurance. In the event that a related problem appears, a specialized workers’ compensation attorney gets involved.

Injury Potential Always Exists

There is no business out there that does not have employee injury potential. This does include the work that you do while being self-employed. Even if you are your own employer, it still means that you can end up faced with a problem. You need to be careful and you want to be protected.

The huge problem is that many believe that it is impossible for them to get hurt. This is why they do not actually think about getting workers’ compensation insurance or do not ask for it when they get a new job. You should not make such a mistake. For instance, when you work at home in your personal office, you can always sprain your hand. In this case you just lost your capability of making money and you will lose wages. The insurance policy helps you to receive money while you are out of action.

Increased Risk Leads To Higher Insurance Cost

Insurance cost will be directly connected to how much risk is involved. In the case of the office work mentioned above, the risks are low. However, in other jobs we have really high risks. Obviously, in the event that risk is higher, the compensation insurance will be more expensive. Businesses end up paying premiums based on the calculated risks involved with the job that is done by the employee.

Various other factors will increase the premiums associated with the workers’ compensation insurance but risk is what counts the most. An assessment of job risk can only be done by authorized individuals.

Compensation For Freelance Work

What is really interesting is that even businesses that hire freelancers need to take care of the compensation. There are situations in which the current workers’ compensation insurance policy covers the freelance work but this is not always the case. It is very important that state and nationwide recommendations are respected. It is the responsibility of the company that hires the freelancer to take care of the insurance but the freelancer also has to the obligation to be sure that this is the case.


The bottom line is that workers’ compensation insurance is highly important and should never be neglected. When you are not sure that you have such coverage and for any reason you do not want to or you cannot ask, the best thing that you can do is to get a separate compensation policy that is designed for your work as an individual. It does not offer the same coverage and will not deal with liability but you will be covered in the event that anything goes wrong when you do your work.