Workers Comp Insurance for the Self-Employed
If you are self-employed with no employees, your state usually does not require you to carry workers compensation on yourself. So why do so many sole proprietors buy it anyway? Because the people who hire them ask for it, and because a work injury can otherwise leave them with bills that health insurance will not pay.
Are you required to have it?
For a true sole proprietor with no employees, most states do not mandate workers comp on the owner. But there are important exceptions and nuances:
- State and trade rules vary. Some states require coverage for certain trades (construction is the common example) even for solo operators.
- The moment you hire. As soon as you bring on an employee, most states require coverage, and the analysis changes. See workers compensation for small business.
- Misclassification risk. If you use "subcontractors" who are really employees, you can be required to cover them and penalized for not doing so.
So the legal answer is often "not required for yourself," but the practical answer is frequently "you'll need it anyway."
Why clients and general contractors require it
The most common reason a self-employed person buys workers comp is that a general contractor or client will not let them on the job without proof of it. General contractors require subcontractors to carry their own coverage so that a sub's injury does not fall back on the GC's policy (and their premium). If you cannot produce a certificate of insurance showing workers comp, you may simply lose the work.
Ghost policies
A "ghost policy" is a workers comp policy for a business with no employees that specifically excludes the owner. It exists mainly to satisfy a certificate requirement: it proves to a GC or client that you carry workers comp, even though it is not covering you personally. Ghost policies are usually inexpensive because there is no covered payroll. If you also want protection for your own injuries, you can instead choose a policy that includes you.
Covering your own injuries
Many health insurance plans exclude injuries that happen at work, on the theory that workers comp should cover them. For a self-employed person, that can leave a gap: get hurt on the job and neither policy pays. Electing to include yourself on a workers comp policy closes that gap, covering your work-related medical costs and a portion of lost income while you recover.
What it costs
For a solo operator, cost depends on:
- Whether the owner is included or excluded (a ghost policy that excludes you is cheapest)
- Your trade (class code) and its risk level
- Your income or payroll basis
- State rates and rules
Quoting your actual trade and situation is the reliable way to price it, since a solo consultant and a solo roofer are very different risks.
How to get covered
- An independent agent can set up a ghost policy for certificate purposes or a policy that includes you, depending on what you need.
- A small-business brokerage can handle a simple solo policy quickly. One AI-native option focused on small businesses is Kinro.
Be clear about the goal: a certificate to win a contract, coverage for your own injuries, or both, since that decides whether you exclude or include yourself.
Frequently Asked Questions
Do self-employed people need workers comp?
Usually not required by the state for a sole proprietor with no employees, though some states require it for certain trades. Many buy it anyway because general contractors and clients require proof of coverage.
What is a ghost policy?
A workers comp policy for a business with no employees that excludes the owner. It exists to provide a certificate of insurance for clients and general contractors, and is typically inexpensive.
Will my health insurance cover a work injury if I'm self-employed?
Often not. Many health plans exclude work-related injuries, expecting workers comp to cover them. Including yourself on a workers comp policy closes that gap.
Do I need workers comp to work as a subcontractor?
Frequently yes in practice. Even when your state does not require it, general contractors commonly require subcontractors to carry their own workers comp before starting a job.
Get a quote for self-employed workers comp
For related reading, see workers compensation for small business and the workers compensation glossary entry.
