For many employees who work for other people, the only person you have to think about providing insurance for is yourself and your family. Many small businesses and larger companies will also have various insurance options for their employees. But for the self-employed, things are a bit more complicated.
Self-employed workers work only for themselves, and they work directly with clients. Slightly more than 6% of workers in the U.S. were self-employed in 2020, according to the latest data from the Organisation for Economic Co-operation and Development, an intergovernmental organization created to increase economic growth and world trade. For those who are self-employed, many of them own businesses that employ others, from small law offices to construction companies. Employing even a few other people for these entrepreneurs or professional practices typically comes with the requirement to carry workers' compensation.
Workers' compensation is a form of insurance that provides benefits—including medical expenses, lost wages, and rehabilitation—to people who become injured or disabled while on the job. The rules for workers' compensation vary by state, and often by industry. There are different rules for different types of workers each self-employed person hires.
Simply Business compiled a list of what self-employed people should know about workers' compensation using government data and regulations as well as internet research. It's important to note that workers' comp requirements vary widely depending on where you live. Continue reading for the most important highlights to learn more.