Do I Need Workers’ Compensation for Myself as a Business Owner?

Running a business comes with risks and rewards, but many business owners overlook their own protection. You make sure your employees have workers’ compensation, but do you need it for yourself?

Deciding whether workers’ compensation insurance is a necessity or simply added protection can help safeguard your investment. Learn about Massachusetts regulations, clear up common misconceptions, and explore key factors to consider.

What Is Workers' Compensation Insurance?

Workers' compensation insurance protects employees who suffer work-related injuries or illnesses. It covers medical expenses, part of lost wages, rehabilitation, and related costs.

For example, if an employee slips on a wet floor or develops an illness from workplace conditions, workers' compensation helps cover their medical bills and lost wages. Most states, including Massachusetts, mandate this coverage.

However, as a business owner, you're not automatically considered an employee. This means you're usually not required to include yourself in the policy, giving you the option to opt-in.

Do Business Owners Need Workers’ Compensation in Massachusetts?

Whether you need workers’ compensation depends on your business structure and needs. Here’s a quick breakdown:

Sole Proprietors, Partners, or LLC Members: Not legally required but can opt-in if desired.
Corporate Officers: Automatically included if owning 25%+ of the business but can opt-out.
Independent Contractors: Not required unless mandated by a contract.
Businesses With Employees: All employees must be covered under Massachusetts law.
Business owners can choose coverage based on their specific risks and needs.

Common Misconceptions About Workers’ Compensation for Business Owners

“My health insurance will cover me.”
Many assume this, but it's usually false. Most health insurance policies exclude work-related injuries. Without workers’ compensation, medical expenses from workplace incidents could fall on you.

“I work in a low-risk environment, so I don’t need it.”
Even in low-risk industries, accidents happen. A slip, trip, or strain injury might seem unlikely—until it isn’t. Workers’ compensation can be a financial lifesaver, even for desk jobs.

“Adding myself to the policy will be too expensive.”
Not necessarily. While rates vary by job and industry, adding coverage for yourself often costs less than you'd expect.

Factors to Consider When Choosing Workers’ Compensation Coverage
If you're still deciding whether to include yourself in your workers' compensation policy, consider the following factors:

Your Industry Risk Level
High-risk industries like construction often make workers' compensation essential. Lower-risk industries like consulting may see it differently.

Cost of Coverage
Workers' compensation costs depend on payroll, job role, and claims history. Premiums for sole proprietors range from $200 per year for office roles to thousands for high-risk jobs.

Income Protection
Workers' compensation covers medical expenses and provides partial wage replacement if you're temporarily unable to work. For business owners, this can offer vital financial support.

Contractual Requirements
Some clients or subcontractor agreements may require workers' compensation, even if not legally mandated.

How Connell & Curley Insurance Agency Can Help

Navigating the complex world of insurance policies is made easier with skilled agents. At Connell & Curley Insurance Agency, with over 50 years of experience, our professional team offers personalized guidance to ensure you're choosing the right policies for your business needs.

Based in Natick, MA, our experienced insurance agents bring unmatched expertise, representing a combined 129 years of industry experience. We’re dedicated to simplifying the insurance process for you and supporting your safety and financial stability.

When it comes to workers’ compensation, we can help you determine the best coverage option based on your business structure, job risks, and personal preferences.

FAQs About Workers' Compensation for Business Owners

Is workers’ compensation mandatory for sole proprietors?
No, sole proprietors in Massachusetts are not required to carry workers' compensation for themselves. However, they can choose to opt into coverage.

Can business owners opt out of coverage?
Yes, in Massachusetts, corporate officers owning at least 25% of the business may opt out of workers’ compensation coverage.

How much does workers' compensation cost?
Premiums vary based on factors like industry risks, payroll, and claims history. For sole proprietors in low-risk roles, rates can start around $200 annually.

What does workers’ compensation cover for business owners?
It typically covers medical costs, partial lost wages, and rehabilitation expenses stemming from workplace injuries or illnesses.

Protect Your Business and Yourself

At the end of the day, your business is one of your biggest investments, and protecting yourself as its owner should be a top priority. Workers’ compensation isn’t just about compliance; it’s about being prepared for unexpected situations that could affect your health and income.

Secure your business with expert insurance services. Contact us or call (508) 470-0053 to discuss your needs. Prefer to start online? Get a quote here!