Insuring Yourself: Worker’s Compensation for Independent Claims Adjusters

If you are an independent claims adjuster, you basically function as a small business. Even though you spend most of your time dealing with insurance, you may forget that it’s important to have good insurance for yourself. One of the major insurance considerations is worker’s compensation. Let’s take a look at some options and considerations for workers compensation as an independent claims adjuster.

Who Needs to Have a Workers’ Compensation Policy?

Workers’ compensation insurance provides cash benefits and/or medical care for workers who become injured as a direct result of their job. It also helps cover employees’ lost wages, medical bills, and legal expenses. The big picture is this: No matter who is responsible for the workplace injury, the employee can receive workers’ comp benefits. In return, workers’ comp protects the business owner from lawsuits related to the injury.

If you don’t have employees, you may not need to carry workers’ compensation insurance from a legal standpoint. Not all employers are required to purchase workers’ compensation insurance. State laws vary, an employer’s responsibility to provide coverage may depend on the number of employees, the type of business, and the type of work. You may still want to invest in a workers’ comp policy for yourself or subcontractors, or you may need to have a policy if another business you work with requires it.

Do I Need Workers’ Comp?

Here are four different scenarios to consider when evaluating whether you should purchase workers’ compensation insurance (even if you are not legally required to):

1. You are a small business owner or sole proprietor without employees or contractors. In this case, you may not need worker’s compensation coverage. However, to meet some client requirements, you may have to complete a sole proprietor workers’ compensation exemption form. Note that this form often requires a filing fee and notary signature.

2. A business wants to use you as a contractor but requires you to have workers’ compensation coverage. Some companies won’t use you as a contractor if you don’t have your own workers’ compensation insurance policy. Businesses are legally permitted to ask for a certificate of insurance (COI) if you want to contract with them.

3. You want to protect yourself in case you’re injured while working. Even if you are a sole proprietor or small business owner working alone, you may choose to buy workers’ comp coverage for yourself simply because it makes good sense (especially if your work involves high-risk activities like construction). If you are injured while performing your work, your workers’ comp policy covers your medical bills and lost wages. That way, you won’t have to try to get your personal health insurance company to cover your injury—something most health insurers won’t do. Health insurance companies also won’t provide partial reimbursement for lost wages the way many workers’ compensation policies do.

4. You are a small business owner or sole proprietor who uses one or more contractors. If you use an independent contractor, subcontractor, or leased employee to perform work for you (even part-time work), you may be required to get workers’ comp coverage. Refer to your state’s laws for specifics.

Keep in mind, if you choose not to get workers’ compensation insurance, you can be held liable for injuries that happen on the job. Best practice is to have coverage for yourself and anyone who works for you, and you should be sure any workers you employ show proof of their own COIs.

2021 Training Can Teach You All About Being an Independent Claims Adjuster

Our insurance training courses are designed to teach you everything you need to know about being a successful claims adjuster. The Practical Adjusting course explains all the requirements to operate as an adjuster. Our continuing education courses can help with many business considerations and teach you to grow in your work. We would love to help you get started or thrive further in your adjusting career. Give us a call today to learn more about our courses!