Workers' Compensation Insurance
for IT Businesses, Consultants & Subcontractors

Technology companies come in all shapes and sizes, from small one-person startups to burgeoning tech empires. But if yours is big enough to have any employees, chances are you may need Workers’ Compensation Insurance.

Designed to cover occupational injury expenses, Workers’ Comp is an important policy that protects both your business and your employees. In fact, it’s such an important policy that almost every state requires employers to carry it. You can find out your state’s requirements in our guide “Workers’ Compensation Laws by State,” or you can talk to an Insureon agent so you understand when you are expected to have coverage in place.

No matter how safe your workplace is, your workers could still suffer an accident that costs them – and you – a big chunk of change, especially if it results in a lawsuit. Workers’ Comp aims to lessen these costs and protect your business’s assets.

How Workers' Compensation Insurance Works for IT Businesses

How Workers' Compensation Insurance Works for IT Businesses

Even in a seemingly innocuous office setting, employees can easily be injured at work. It may take years of typing to develop carpal tunnel syndrome, but it only takes one bad lift of a heavy box for an employee to throw out their back. In both situations, Workers' Comp coverage may apply, so long as the injuries were caused by an employee's work.

If they decide to make a claim, your Workers’ Compensation Insurance can…

  • Cover the employee’s medical bills.
  • Cover a portion of the employee’s wages while they recover.

In return, the employee can't sue your business over the injury in most cases. However, a lawsuit may still be possible if they allege your business’s failure to provide a safe work environment caused their injury or illness. In this case, the Employer’s Liability Insurance portion of your policy may fund your legal costs, including…

  • Attorney fees.
  • Court fees.
  • Settlements and judgements.

Even if the claim is meritless, the cost to resolve the suit may be significant. Good thing your Employer’s Liability coverage can provide funds to defend against frivolous lawsuits, too.

At the end of the day, Workers’ Compensation Insurance can help to reduce your expenses while a valuable employee is away and recovering. It can also help your business when an employee blames their injury on your negligence.

Things to Keep in Mind about Tech Workers' Comp Insurance

Things to Keep in Mind about Tech Workers' Comp Insurance

Not every business is the same and not every insurance policy is, either. Before you decide on a Workers’ Comp policy, think about your business’s needs and risks. To do that, consider the following questions.

Should You Exclude Yourself from Your Workers’ Comp Policy?

Because you are the owner of your IT company, some states may allow you to exclude yourself from your Workers’ Compensation coverage. This might save you some money on your policy, but it means you can't draw on the coverage if you get injured at work. 

How Are Your Workers Classified?

Are your workers employees, contractors, or volunteers? Depending on the way your workers are classified, you may have varied legal responsibilities. Employees and volunteers, for instance, usually need to be covered by Workers’ Comp; contractors do not.

Recently, legal requirements regarding Workers’ Comp have become especially poignant in the tech industry. Multiple IT companies have had to define who exactly is an employee and who is an independent contractor, according to The Wall Street Journal. Startups like Instacart, Shyp, and Sprig have all switched to a W-2 employee model rather than using contractors to avoid misclassification lawsuits and fines from the Department of Labor.

To avoid legal trouble, enlist some HR or legal help to determine if your workers are properly classified and to understand how many employees you have for Workers’ Comp purposes.

What Else Can Workers' Comp Coverage Do?

Some policies may offer coverage…

  • For employees who work in states other than where your business is located.
  • For certain injuries and illnesses that your state may or may not mandate coverage for.
  • For support payments to dependents of employees who suffer fatal on-the-job injuries.

Lastly, remember that the best way to save money on your Workers’ Compensation Insurance is to not have to use it. Fostering a safe working environment and training employees in workplace safety is crucial in any risk management plan and may reduce accidents and injuries.

Contact an Insureon agent if you have any questions about your policy or your Workers’ Comp obligations.

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