Workers Compensation Insurance for Self Employed People: Required, Optional, or a Contract Term?
Reference Guide
There is no lawsuit or settlement behind this question — it is a coverage rule, and it is set state by state. In the states we checked, a sole proprietor with no employees does not have to insure themselves, and an ordinary policy leaves the owner out unless the owner is written in. The real pressure usually comes from a client contract, and from Florida if you work in construction.
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What the Law Actually Says
Workers' compensation is built for employees. A self-employed owner is usually the employer, not the employee, so the law does not force the owner to insure their own injuries.
Wisconsin's agency puts it plainly: sole proprietors that have no employees are not required to carry coverage, and the same goes for partnerships and LLCs made up only of partners or members. California requires coverage once a business has one or more employees (Labor Code Section 3700); an owner who wants to cover themselves must have that inclusion clearly stated in the policy or added by endorsement.
The trap is the default. Wisconsin notes that all policies exclude the sole proprietor, partners and LLC members unless specifically endorsed to include them. Buying “a workers' comp policy” is not the same as being covered by one.
Case details
No court case drives this topic. The rules sit in state statutes and agency guidance: Wisconsin's Worker's Compensation Act (the independent-contractor test is s. 102.07(8)), California Labor Code Sections 3700 and 3351, Florida Statutes 440.02 and 440.05, Washington's elective-coverage rule (WAC 296-17-31007), and New York's CE-200 exemption certificate. The federal Department of Labor's independent-contractor rule governs wage law under the FLSA, not state workers' comp — Wisconsin's guide says a federal classification does not decide comp status there.
Status: A State Rule, Not a Lawsuit
Florida construction: a sole proprietor working in the construction industry counts as an employee under s. 440.02, so the exemption route is incorporation. No more than three officers may elect exemption, each owning at least 10 percent; an LLC member owning at least 10 percent counts as an officer. An exemption certificate costs $50 and is valid for 2 years.
Washington: owners can elect coverage from L&I on form F213-042-000.
New York: a business with no employees can get a CE-200 certificate — but only to show a government agency, not a private client.
Does the Rule Apply to You?
Three questions settle most cases.
Do you have employees? If yes, they must be covered — the owner's own choice does not extend to them. Florida's general threshold is four or more employees, but in construction it is one or more.
Are you really self-employed? Wisconsin applies a 9-part test; a worker who fails it and has no employees of their own is the employee of whoever they work under. Calling yourself a contractor does not make you one for comp purposes.
Does a contract require it? Wisconsin confirms a contract may require a sole proprietor to carry a policy even when the law does not, and its comp division has no jurisdiction over those clauses. Compare your state's figures on our state-by-state page, or see North Carolina's rules.
What Coverage Costs and What It Pays
Wisconsin: an endorsed owner's premium uses the payroll figure for individuals in the current rate circular. A “minimum-minimum premium policy” currently costs at most $900 — but it does not cover the sole proprietor. If an audit finds no payroll, the minimum charge is the $220 expense constant and the rest is refunded ($680 in the agency's example).
Washington: elective owner coverage is billed on 480 hours or actual hours worked each quarter.
California's agency adds that a comp policy for a sole proprietor may not be the best choice and that health, life or disability income insurance can be a viable option. To see what a comp claim pays once you are covered, use our workers' comp calculator or a state version such as Wyoming, South Dakota or Washington, DC.
Recent Changes Worth Knowing
January 1, 2013 — Florida Exemptions Go to Two Years
Florida construction exemption certificates issued from this date are valid for 2 years; the state must send notice at least 60 days before expiration.
January 10, 2024 — Federal Contractor Rule Published
The Department of Labor publishes its independent-contractor rule under the FLSA, effective March 11, 2024. It governs wage law, not state comp.
February 26, 2026 — Replacement Proposed
The Department of Labor announces a proposed rule on employee or independent-contractor status, published at 91 FR 9932.
April 28, 2026 — Comment Period Closes
Public comments on the federal proposal close at 11:59 ET. A final federal rule still would not decide who must buy state workers' comp.
As of October 2026 — State Rules Unchanged in Substance
In the state sources checked for this page, owners with no employees remain outside the mandate, with Florida construction the main exception.
Three Things to Watch For
Self-employed people buy this coverage mostly because a client demands proof, which makes it easy to sell the wrong thing:
A “cheap comp policy” that excludes you
Wisconsin's minimum-minimum premium policy satisfies some contracts but does not cover the sole proprietor. If you want your own injuries covered, the policy must name you by endorsement.
Disability insurance sold as a substitute
Wisconsin states that disability insurance is not workers' compensation and does not meet a contract that requires comp. If the contract says workers' comp, a disability policy will not satisfy it.
Exemption papers that do not do what you think
New York's CE-200 cannot be shown to a private client or its insurer, and a Florida exemption that contains false information is a third-degree felony. Anyone offering to “get you exempt” without these limits is not describing the official process.
Self-Employed Workers' Comp — Questions People Actually Ask
Short answers to the questions people ask most about this case.
Do self-employed people have to carry workers' comp?
Usually not for themselves. Wisconsin says sole proprietors with no employees are not required to carry it, and California's mandate starts with one or more employees. Florida is the exception for construction: a sole proprietor in that industry counts as an employee.
Can I buy workers' compensation insurance for myself?
Yes, in the states we checked. Wisconsin lets owners buy it voluntarily, California requires the owner's inclusion to be stated in the policy or added by endorsement, and Washington offers owner coverage through L&I on form F213-042-000.
How much does workman's comp insurance cost for a self-employed person?
It depends on your state and trade. In Wisconsin a minimum-minimum premium policy costs at most $900 but does not cover the owner; an endorsed owner pays based on the payroll figure for individuals in the rate circular. Washington bills elective owner coverage on 480 hours or actual hours per quarter.
A client says I need a certificate of insurance. Is that legal?
Yes. Wisconsin confirms a contract may require a sole proprietor to carry comp even when the law does not. The usual reason, per the agency, is that the contractor wants to avoid an audit premium dispute with its own carrier.
Can I just sign a waiver instead?
Not in Wisconsin: no agreement to waive the right to compensation is valid under s. 102.16(5). In Florida, construction corporate officers can file a notice of election to be exempt — $50, valid for 2 years — but an exempt officer is not entitled to benefits.
What is a CE-200 in New York?
A Certificate of Attestation of Exemption for entities operating in New York with no employees. It can only be shown to a government agency issuing a license, permit or contract; building-permit certificates are job-specific. It cannot be used with a private business or its carrier.
I got hurt working for myself. Is there a lawsuit or settlement I can join?
No — we found no class action or settlement on this topic. Without your own endorsed coverage, comp does not pay your injury. If someone else caused it, that is a different question; see personal injury vs. workers' comp.
Does the new federal independent contractor rule change this?
Not directly. The Department of Labor's proposal of February 26, 2026 concerns wage law under the FLSA. Workers' comp status is decided under state law — Wisconsin says a federal classification does not settle it.
About This Information
Editorially Reviewed — Content reviewed for accuracy using published legal research, government data, and verified court records. See our methodology. Reviewed by Leonard Goldberg, Editor · Last updated - $236 billion in real payouts analyzed · See what we found
This page is for general information only and is not legal advice. Lawsuit status, eligibility, and compensation can change. Settlement Insight is not a law firm and does not represent any party. Consult a licensed attorney about your specific situation.
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