Workers Comp Blog

Do Independent Contractor’s Need Workers Comp in California?

One frequently asked question in our industry is: do independent contractors need workers comp insurance? How about 1099 independent contractors in California?

If you are truly an independent contractor by definition and you meet the government’s guidelines then the answer would be no. You must be very careful when determining whether or not you are classified as an employee or a true independent contractor, the answer to that depends on many factors.

Some of these factors are included but not limited to; how they classify the “Independent contractor” or 1099. The Government has certain stipulations in regards to determining if an independent contractor is really that or is considered an “employee”. Some of these are how the financial arrangement is set up, how involved the company is in telling the “independent contractor” how to complete their work and scheduling of work etc. when you are determining, do California 1099 independent contractors need workers comp insurance?

Many people get confused as to whether or not they are actually an independent contractor or should be considered an employee. If you are unsure there are tons of resources you can use to find this out. One of the best is the IRS website, click here for the specific link you would use

You must be very careful when determining if you are a 1099 independent contractor in the eyes of your insurance carrier vs. the government. The insurance company’s stipulations may vary from the governments significantly. You can almost be certain that you will be audited by your carrier at some point during or after your policy period ends. At that time they will ask you for all types of information and that will include but not limited to you having  to account for any 1099’s or independent contractors you may have. If they question whether someone is truly an independent contractor or an actual employee, they can ask for even more info regarding that independent contractor from the insured. They may ask for proof of insurance from that contractor showing that it is truly a separate business. They may also ask for proof showing that you are not their sole employer or the only means of income. If the 1099 for any reason is unable to provide what they are looking for, the “employer” may be obligated to pay additional premium on all of the wages for that 1099 whom will be considered an “employee.” 

If you take anything from this please understand how you or your 1099’s/employees are classified whether it is in the government’s eyes or your carrier. In doing so it will save time and most importantly it could avoid you owing premium you had not originally accounted for and possibly even fees your carrier may charge you on top of that premium.