Do Very Small Business’ Need Workers’ Compensation Insurance?
One of the questions that we get at Leaders’ Choice quite frequently has to do whether small businesses that are truly “Mom and Pop” are required to have Workers’ Comp insurance. Well, that depends…
In California the answer is…
…probably not as long as you have no employees. The way the law is written, if you and/or your spouse are the sole owners and you have NO employees then Workers’ Compensation coverage is optional. However, as soon as you make your first hire, even a temporary one, then you have to provide Workers’ Compensation Insurance.
Another business that is generally exempt is “the consultant”.
So if you are an independent contractor who filed a DBA and collects 1099s and file your taxes that way and you don’t have any employees, chances are you don’t need Workers’ Compensation Insurance either. Especially if you work out of a home office.
Burning yourself while drinking hot coffee, telling the kids to keep it down, and trying to get a package ready for Fed Ex is not a job related accident even if it feels that way.
The best thing to do is talk to your insurance broker, agent, or an attorney. Feel free to give us a call or drop us a line and tell us your circumstances. We’d be happy to sort it out for you and guide you in the right direction.
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