If you get hurt on the job, worker's compensation insurance may cover your medical bills, lost time at work, and some other expenses. In most cases, you submit worker's comp claims to your employer. Unfortunately, however, if you are self employed, you may not have access to this type of coverage, but there are a variety of other options.
Here's what you need to know after an accident or if you just want to ensure you're ready for anything.
1. Your Own Policy
As a self-employed individual, you can purchase your own worker's compensation insurance. There are several private companies that offer policies. Generally, the premiums are based on the danger inherent in your job as well as other factors. For example, someone who works on roofs or with dangerous machinery may face higher premiums than someone who works in an office.
If you get hurt and you have a policy, you need to put in a claim to your insurer. The insurer may require proof that the injury occurred while working in order to pay the claim. If the insurer balks at paying your claim, you may need to consult with a worker's compensation attorney. They can help you argue your case.
2. The Right Employment Classification
In many cases, as a self-employed individual, you will do work for clients. If you do repeated work for the same client, you need to ensure that you are classified correctly. In particular, you need to ensure that you truly are still an independent contractor and not an employee.
The Internal Revenue Service sets the criteria for these classifications. As a general rule of thumb, a contractor has control over how the work gets done. They typically supply their own tools of the trade, and they accept the risk of profit and loss. An employee, in contrast, has their schedule, how they perform tasks, and other details set by the employer.
Classification can be critical when it comes to worker's comp. To explain, imagine a small business owner hires you as a subcontractor, and you get hurt while working for that company. As an independent contractor, you have no resource to submit a worker's comp claim to that company. However, if an employment expert determines that you were misclassified and that you were truly an employee, you are entitled to put in a worker's comp claim.
3. Disability Insurance
As explained above, as a self-employed person, you are only entitled to worker's comp if you purchase your own plan. However, you are eligible to receive disability coverage. When you pay your taxes, you pay Social Security Insurance, and that entitles you to disability. Although these benefits are not the same as worker's comp, you should look into them. To increase the chances of your application being accepted, you may want to consult with a disability attorney.
4. Other Options
If you don't have access to worker's comp insurance and if disability coverage doesn't meet your needs, you may want to consider some other options. In particular, if you were hurt due to another individual's negligence, you may want to make a claim against their homeowner's or business liability policy. To explain, imagine you are doing carpentry work for a homeowner, and their dog bites you. In this case, you may want to think about a negligence claim. To illustrate another example, imagine you are a self-employed courier. You get hurt due to a faulty elevator when taking a package to a client's office. In this case, you may also be able to make a negligence claim.
When you are self-employed, you don't have the same level of protections as someone who is employed. To counteract that risk, consider booking your own worker's comp policy. Also, make sure you are classified correctly when working repeatedly for the same client, and finally, consult an attorney if you ever get hurt and have questions. You can learn more by clicking here.
Share6 March 2017
Too many single people assume they don't need to plan their estate. My brother fell into this category, and his unexpected passing left our entire family struggling to deal with his home, belongings, and financial accounts. It took nearly three years for the courts to set up a deal because he left no paperwork detailing how he wanted his estate divided. The situation immediately convinced me to work on my own estate, even though I'm still in my early 30's and don't have children or a spouse to worry about. Since it's a little harder to pick beneficiaries and estate managers when you're single, I collected the resources I used for making my own decisions and decided to publish them here on my blog. Use these resources before talking to an estate planning attorney so you're prepared for making hard decisions.