Workers' Comp Insurance for the Self-Employed and Independent Contractors

Short answer: in most states, a self-employed person with no employees is not required to carry workers' compensation insurance on themselves — but they can usually elect to buy it, and in a handful of situations they must. Workers' comp is employer-to-employee coverage, so a business with no employees generally has nobody it is required to insure. What changes the answer is your state, your trade, and increasingly your contracts, because general contractors and clients routinely demand a certificate of insurance even where the state does not.

Do I Need Workers' Comp If I Am Self-Employed?

Start by separating two questions that get blended together constantly:

1. Do you have employees? If yes, the state's mandatory coverage rules apply to you as an employer, and the exemption discussion below is irrelevant to your workers. Most states require coverage from the first employee; a minority set a threshold of two, three, four, or five. See workers' comp requirements by state for how the thresholds differ.
2. Do you want coverage on yourself? That is a separate, usually voluntary decision called elective or optional coverage, and it is priced and filed differently from employee coverage.

For the owner-only case, three state agencies say it about as plainly as it gets:

• New York: “Workers' compensation coverage is not required for a sole proprietor who does not have employees.” The Workers' Compensation Board extends the same treatment to partnerships, LLCs, and LLPs with no employees, and to one- or two-person corporations where those individuals own all the stock and hold all the offices.
• Washington: Labor & Industries calls owner coverage “optional coverage” and states it is available — not required — for sole proprietors, partners, limited liability partners, excluded corporate officers, and excluded LLC members.
• California: the Division of Workers' Compensation frames the mandate around employment: all California employers must provide benefits to their employees under Labor Code section 3700, and the obligation attaches once a business employs one or more people.

That pattern — not required on yourself, available if you want it — holds in the large majority of states. It is not universal, and the exceptions below are the ones that actually cost people money.

Independent Contractor Workers' Comp Insurance: Why the Certificate Gets Demanded

If you are an independent contractor, the pressure to carry workers' comp usually comes from the contract, not the statute. The reason is statutory employer liability: in most states, a general contractor who hires an uninsured subcontractor can be held responsible for that sub's injured workers as if they were its own.

North Carolina's statute is a clean example. N.C. Gen. Stat. §97-19 makes any principal, intermediate, or subcontractor who sublets work without first obtaining a certificate of coverage “liable… to the same extent as such subcontractor would be” for compensation owed to that subcontractor's injured employees. Florida works the same way in practice: where a subcontractor has no coverage for its employees, those workers become employees of the contractor for workers' comp purposes.

This is why a general contractor asks for your certificate even when your state would let you go bare. The GC is not being difficult — an uninsured sub is a direct balance-sheet exposure and, in many states, an audit finding that adds your payments to the GC's own premium at audit.

There is one narrowing worth knowing: some states expressly do not require a certificate from a subcontractor that is a sole proprietorship with no employees. Michigan's workers' disability compensation guidance takes that position, while noting that a general contractor may still require one by contract. The contractual demand survives the statutory exemption — which is exactly why owner-only contractors end up buying coverage they are not legally required to hold.

The Trades Where Owner-Only Coverage Is Mandatory

Two states are worth calling out because the usual “no employees, no coverage” rule simply does not apply.

California roofing and four other license classifications

The Contractors State License Board requires active C-8 concrete, C-20 warm-air heating / HVAC, C-22 asbestos abatement, C-39 roofing, and C-61/D-49 tree service licensees to carry workers' compensation insurance or hold a valid Certification of Self-Insurance — in CSLB's words, “whether or not they have employees.” A solo roofer in California with a C-39 license is required to be covered. Rates for roofing work are among the highest in the country; see our class code directory for how the trade codes compare.

Florida construction

Florida statute treats sole proprietors and partners in the construction industry as employees, so they cannot exempt out at all. The exemption route in construction is open only to corporate officers and LLC members, and it is tightly bounded: a maximum of three officers per corporation or affiliated group may elect exemption, each must own at least 10% of the stock and be listed with the Division of Corporations, and the application carries a $50 fee. Non-construction exemptions run on a separate, looser track.

How to Buy Workers' Comp Insurance for the Self-Employed

Where coverage on yourself is voluntary, you are buying elective coverage — and in most states that is a specific filing, not just a checkbox on a quote form.

• Ohio (state fund): coverage is elective for sole proprietors, partnerships, LLCs acting as either, individuals incorporated as a corporation, family-farm corporate officers, and ordained ministers. You elect by filing form U-3S with the Bureau of Workers' Compensation. Coverage is effective the date BWC receives the application — not the date you mailed it — and if you are hurt at work without having elected, BWC will not pay.
• Washington (state fund): file the Application for Elective Coverage, form F213-042-000, with Labor & Industries. Cancellation for sole proprietors, partners, and member-managed LLCs is effective the date L&I receives written notice.
• North Dakota (state fund): Workforce Safety & Insurance offers owner, partner, corporate-officer, and spouse coverage that it describes as not required by law.
• Wyoming (state fund): elective coverage is available, but with a commitment — once elected, it must stay in place a minimum of eight calendar quarters. Elections filed within 30 days of account setup start with the first reporting period; otherwise the election must be filed at least 30 days before a calendar quarter and takes effect the following quarter.
• Private-market states: you buy from a carrier, but the owner is not automatically insured. The California Department of Insurance is explicit that a sole proprietor's inclusion “must be clearly stated in the workers' compensation policy or must be added as a coverage endorsement.” If you assume you are covered because you have a policy, verify the endorsement.

What Does It Cost?

There is no official national minimum-premium figure. Minimum premiums are set per state and per class code inside carrier and rating-bureau filings made with the state insurance regulator. Brokers commonly quote roughly $750 to $1,200 a year for an owner-only policy; treat that as an industry estimate, not a regulated number.

The bigger surprise for owners electing coverage is that your actual earnings usually do not set the premium. States impute a payroll figure instead:

• Ohio codifies it in statute: reportable payroll for an electing owner is not less than 50% and not more than 150% of the statewide average weekly wage.
• North Dakota charges owners the class rate applied to the maximum taxable payroll cap rather than actual earnings.
• In NCCI states, Basic Manual minimum and maximum payroll rules push an included owner's rating payroll up to a state-specific floor regardless of what the owner actually draws.

The practical effect: a low-earning solo owner in a high-hazard class code can pay far more than a naive “payroll ÷ 100 × rate” calculation suggests. Run your class code and state through our workers' comp cost calculator to get the rate side of the equation, then ask the carrier or state fund what payroll figure they will impute.

Alternatives to Workers' Comp for the Self-Employed

If nothing legally or contractually forces you to buy it, the risk you are managing is your own lost income and medical cost after a work injury. The California Department of Insurance addresses this directly in its consumer guide: “Purchasing health, life, and/or disability income insurance can be viable alternatives to workers' compensation for a sole-proprietor.”

Texas Is the Structural Exception

Texas is the only state where workers' compensation is elective for private employers generally, not just for owners. The Texas Department of Insurance states that Texas does not require most private employers to carry it. Employers that opt out are called non-subscribers and take on separate obligations — notifying employees and the Division of Workers' Compensation, and filing injury reports once they reach five employees. Exceptions apply to public employers and to building or construction contractors working for governmental entities.

Can I Deduct the Premium?

Be careful here, because most articles on this cite a publication that no longer exists. The IRS discontinued Publication 535, Business Expenses; small-business expense guidance now lives in Publication 334, Tax Guide for Small Business, chapter 8. The old Pub 535 language that is still quoted everywhere described deductible workers' comp as coverage “set by state law that covers any claims for bodily injuries or job-related diseases suffered by employees in your business” — employees, not the owner. Current Pub 334 does not address an owner's own workers' comp coverage at all. Treatment of a sole proprietor's premiums on themselves is unsettled; ask a tax professional rather than assuming a deduction.

Frequently Asked Questions

Do self-employed people need workers' comp insurance?

In most states, no — a self-employed person with no employees is not required to carry workers' comp on themselves, and can usually elect it voluntarily instead. New York's Workers' Compensation Board states coverage is not required for a sole proprietor without employees, and Washington L&I calls owner coverage optional. The exceptions matter, though: California requires it of active C-8, C-20, C-22, C-39, and C-61/D-49 licensees whether or not they have employees, and Florida treats construction-industry sole proprietors as employees who cannot exempt out.

How do I get workers' comp insurance for self-employed work?

In the four monopolistic state-fund states you file an elective coverage form with the fund — Ohio's U-3S, Washington's F213-042-000, North Dakota's owner coverage election, or Wyoming's election (which must remain in place at least eight calendar quarters). In private-market states you buy from a carrier, but the owner is not included automatically: the California Department of Insurance notes a sole proprietor's inclusion must be stated in the policy or added by endorsement. Confirm the endorsement before you assume you are covered.

Does an independent contractor need workers' comp insurance?

Usually not by statute if you have no employees, but frequently by contract. General contractors demand a certificate because statutory-employer laws make them liable for an uninsured sub's injured workers — North Carolina's §97-19 makes a contractor who sublets without obtaining a certificate liable to the same extent as the subcontractor. Some states, such as Michigan, do not require a certificate from a sole proprietorship with no employees, but a general contractor can still require one contractually.

How much is workers' comp insurance for a self-employed person?

There is no official national figure. Minimum premiums are set per state and per class code in filings made with the state insurance regulator, and brokers commonly quote roughly $750 to $1,200 a year for an owner-only policy as an industry estimate. Note that states impute payroll for electing owners rather than using actual earnings — Ohio uses 50% to 150% of the statewide average weekly wage, and North Dakota applies the maximum taxable payroll cap — so a low-earning owner in a high-hazard class code often pays more than expected.

What is a ghost policy for workers' comp?

“Ghost policy” is broker shorthand with no regulatory definition. The underlying product is a minimum-premium policy that excludes the owner, bought so a solo contractor can hand a client a certificate of insurance. California's State Compensation Insurance Fund describes a minimum premium as the lowest premium it can charge to cover the cost of handling the policy. Because the owner is excluded, it satisfies a certificate requirement but does not pay benefits if the owner is injured.

Can I use a New York CE-200 to show a general contractor I am exempt?

No. The New York Workers' Compensation Board states the Certificate of Attestation of Exemption can only be used to attest to a government entity when applying for a permit, license, or contract. It cannot be used to show another business or that business's insurance carrier that coverage is not required, and it cannot be used to respond to the Board about a non-compliance period.

Is health insurance a substitute for workers' comp if I am self-employed?

For the financial risk, sometimes. The California Department of Insurance consumer guide states that purchasing health, life, and/or disability income insurance can be a viable alternative to workers' compensation for a sole proprietor. It is not a substitute for a legal or contractual requirement — it will not satisfy a contractor licensing rule or a client that requires a workers' comp certificate.

Sources

• New York State Workers' Compensation Board, “Who Is Required to Have Workers' Compensation Coverage” and Certificate of Attestation of Exemption (CE-200) — wcb.ny.gov (retrieved 2026-07-21).
• Washington State Department of Labor & Industries, workers' compensation account and optional owner coverage; Application for Elective Coverage F213-042-000; WAC 296-17-31007 — lni.wa.gov (retrieved 2026-07-21).
• California Department of Industrial Relations, Division of Workers' Compensation FAQs (Labor Code §3700) — dir.ca.gov (retrieved 2026-07-21).
• California Contractors State License Board, Workers' Compensation Requirements (C-8, C-20, C-22, C-39, C-61/D-49) — cslb.ca.gov (retrieved 2026-07-21).
• California Department of Insurance, Workers' Compensation consumer guide — insurance.ca.gov (retrieved 2026-07-21).
• Ohio Revised Code §4123.01 (elective coverage; 50–150% of statewide average weekly wage) and Ohio BWC form U-3S — codes.ohio.gov, bwc.ohio.gov (retrieved 2026-07-21).
• North Dakota Workforce Safety & Insurance, coverage requirements and coverage types (owner coverage, maximum taxable payroll cap) — workforcesafety.com (retrieved 2026-07-21).
• Wyoming Department of Workforce Services, workers' compensation wage reporting and optional owner coverage — dws.wyo.gov (retrieved 2026-07-21).
• Texas Department of Insurance, employer workers' compensation pages; Texas Labor Code ch. 406 — tdi.texas.gov, statutes.capitol.texas.gov (retrieved 2026-07-21).
• Florida Department of Financial Services, Division of Workers' Compensation construction exemptions; Fla. Stat. §440.02 — myfloridacfo.com (retrieved 2026-07-21).
• North Carolina Industrial Commission, N.C. Gen. Stat. §97-19 — ic.nc.gov (retrieved 2026-07-21).
• Michigan Department of Labor and Economic Opportunity, Workers' Disability Compensation Agency employer guidance — michigan.gov (retrieved 2026-07-21).
• State Compensation Insurance Fund of California, minimum premium policies — statefundca.com (retrieved 2026-07-21).
• Internal Revenue Service, Publication 334, Tax Guide for Small Business (Publication 535 discontinued) — irs.gov (retrieved 2026-07-21).

This article is general information, not legal, tax, or insurance advice. Coverage rules change and vary by state; confirm your obligations with your state's workers' compensation agency or a licensed agent before relying on anything here.