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Subcontractors and Workers’ Comp—When Might they Need to be Covered?

Surprises are great, but not when it comes to workplace injuries. Workers’ comp insurance can be confusing, but it can be made even more so if you’re a subcontractor or regularly employ subcontractors. That’s because the laws surrounding subcontractors and workers’ comp aren’t as cut and dry as we’d like them to be. 

Here we’ll go over workers’ comp for subcontractors as well as the factors that affect it, such as state laws, industry, and more.

What Is Workers’ Comp?

Workers’ comp insurance is a type of business insurance intended to provide protection to workers who experience a workplace injury or work-related illness. Workers’ comp can include wage compensation benefits for temporary disabilities or permanent disabilities that prevent the employee from working, and it ensures the employee receives the needed medical care at no expense to the injured employee.

The specific benefits and requirements of workers’ comp vary by state, but generally speaking, it includes coverage for lost wages and medical care.

The Importance of Workers’ Comp

If you have ever worked for someone else, you’ve likely been informed about workers’ comp policies before. For subcontractors and those who employ them, however, there might be some confusion about workers’ comp. When is it required? When it is essential — even if it’s not required?

If you have employees, you almost certainly need to buy Workers’ Compensation.  If you use subcontractors in your business, you should ask to see their proof of Workers’ Compensation insurance by requesting a Certificate of Insurance.  Otherwise, you risk potential liability of a workplace injury of someone who does not work directly for you.  Workers’ comp is critical  for  protecting yourself and your business from  skyrocketing medical costs and lost wages associated with an on-the-job injury or illness. 

Always Require Your Subcontractors Carry Their Own Workers’ Compensation Policy.

  • Client Requires Proof of Coverage — Before entering into an agreement with a subcontractor, get confirmation and proof of workers’ comp coverage by asking for a Certificate of Insurance.
  • You Want to Reduce Risk for Yourself— If your business does sub contractural work on behalf of others, make sure you have Workers’ Compensation before you bid on your next job.  It will almost certainly be a requirement of your prospective client, and it’s just good business sense to protect yourself and your business from a potentially catastrophic claim. 
  • Going Without Workers’ Compensation is a Bad Bet  — Regardless of what is required legally, the bottom line is most businesses cannot afford the cost of medical care and lost wages out of pocket. Even a relatively minor injury can keep one of your employees out of work for enough time that lost wages and medical costs could put your business out of business. All businesses with employees need Workers’ Compensation to ensure a workplace injury is covered. 

Outside of the legal requirements, many businesses find that having coverage for their subcontractors is important for protecting against liability for a subcontractor’s workplace injury. Always ask them to provide a Certificate of Insurance to ensure they are covered. If it’s a lengthy contact, request periodic COIs throughout the contract to ensure the coverage hasn’t lapsed.

If your subcontractor is injured while working on your contract and isn’t covered by workers’ comp, you could be held responsible for paying for their medical bills, recovery costs, and lost wages. 

Cerity — Workers’ Comp Made Easy

At Cerity, we work hard to understand workers’ comp from all angles so you don’t have to. We are committed to making workers’ comp for subcontractors and those who employ them simple and easy with a flexible, more affordable way to get workers’ comp coverage. Our policies give subcontractors who work in all industries except construction the coverage they need — without phone calls and paperwork.

Check out our online quote tool to get coverage today. We do what we do using proprietary tools and modern technology to help you protect yourself, your subcontractors, and your business so you can keep doing what you do.

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Learning Center Resources


  • Top Workers’ Comp Questions
  • Small Business Resources
  • Workplace Safety Tips