Freelancers and 1099 contractors enjoy flexibility—but with that freedom comes responsibility, especially when it comes to insurance. One of the most misunderstood coverages in the independent contractor space is workers’ compensation insurance.
Do contractors really need it?
Are businesses required to provide it?
And what happens if someone gets hurt on the job?
At Bunker, we help simplify the insurance puzzle for freelancers and the businesses that hire them. Let’s break down how workers’ comp fits into the world of independent work.
🧩 What Is Workers’ Compensation Insurance?
Workers’ comp covers medical expenses, lost wages, and rehabilitation if someone gets injured or sick while working.
Traditionally, it’s associated with full-time W-2 employees—but that doesn’t mean 1099 contractors are off the hook. In fact, depending on the state, industry, and contract, independent contractors may be required to carry their own workers’ comp.
🚧 When Does Workers’ Comp Apply to Contractors?
✅ 1. When State Law Requires It
Each state has different workers’ comp laws. Some require anyone doing hazardous work—regardless of employment status—to carry coverage.
Examples include:
- California: Contractors in many industries must carry workers’ comp if hiring subcontractors.
- New York: Certain licensed trades and construction workers are mandated to have coverage.
✅ 2. When the Contract Requires It
Many businesses that hire 1099s include a workers’ comp clause in their vendor agreement.
This protects the hiring business from legal liability if the contractor gets injured on the job.
✅ 3. When You Hire Other Contractors or Employees
Even if you’re a solo contractor, the moment you bring on a helper or subcontractor, some states require you to carry workers’ comp. It’s about protecting the people under your umbrella.
⚠️ What Happens If a Contractor Isn’t Covered?
- 🚑 Injury risk: Without workers’ comp, an injured contractor might sue the business for medical costs or damages.
- 🚫 Contract loss: Failing to provide proof of coverage can get you removed from a project or prevent onboarding.
- 💰 State penalties: Some states impose fines or stop-work orders for uninsured contractors.
💡 Why Hiring Businesses Should Care
If you hire 1099s, their lack of coverage can still become your problem.
That’s why more companies require proof of workers’ comp—especially in high-risk industries like:
- Construction
- Landscaping
- Transportation
- Cleaning & sanitation
- Healthcare (e.g. traveling nurses)
Tip: Ask for a Certificate of Insurance (COI) listing you as an Additional Insured. This ensures coverage is in place and protects you from unexpected claims.
🔧 How to Get Workers’ Comp as a 1099 Contractor
With Bunker, getting the right coverage is fast and easy.
- Tell us your industry and contract needs
- Get matched with a compliant workers’ comp policy
- Receive your COI instantly—ready to share with your client or upload to a portal
We work with A-rated carriers and provide flexible monthly payment options to fit your budget.
🧠 Bottom Line: Workers’ Comp = Smart Risk Management
Whether you’re a contractor or a hiring business, understanding how workers’ comp applies is key to avoiding costly mistakes.
- Contractors: Don’t assume you’re exempt. Check your state rules and contract terms.
- Hiring companies: Always require and verify coverage—especially in physical or regulated industries.
Need help navigating your next contract or state rule?
Visit buildbunker.com to get insured and stay compliant—fast. You can also contact us at support@buildbunker.com!
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