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Are you a contractor worried about what happens if you get hurt while working? Many contractors face this concern, unsure about their financial security in case of injury that occurred at your workplace. Unlike traditional employees who are covered with workers compensation insurance, self-employed contractors often lack the safety net of workers’ compensation benefits. This leaves them vulnerable to hefty medical bills and lost wages if accidents occur. 

However, understanding contractor workers’ compensation doesn’t have to be complicated. In this guide, ERA experts explain its definition, rights, and obligations for contractors in case of unforeseen accidents on the job.

While traditional workers’ compensation typically covers employees, contractor workers’ comp extends to employed contractors. 

Contractors in the USA often don’t receive benefits such as health insurance or paid time off from their companies. 

Workers’ comp for employed contractors helps bridge this gap by covering medical expenses, lost wages, and other benefits if a contractor is injured while working on a project.

workers compensation contractor
Contractor Workers’ Compensation is crucial for both contractors and employers.

Actual However, terms and conditions for contractor workers’ compensation vary depending on local laws and regulations and the contract terms between the contractor and the company hiring them. 

Should Employed Contractors Have Workers’ Compensation?

Yes, employed contractors should have workers’ compensation. Due to varying state laws, the amount of workers’ compensation depends on your business location. If state regulations mandate coverage for employees and contractors, companies must ensure their contractors are covered.

While workers’ compensation provides benefits for work-related injuries and illnesses, know that you may still face significant risks in other areas. Exploring additional types of insurance is advisable to safeguard self-employed individuals and independent contractors. These alternative coverages contain:

  1. General liability insurance shields your business against various claims, including bodily injury, personal and advertising injury, and property damage.
  2. Errors and omissions insurance offers protection when errors occur in the professional services provided to clients.
  3. Commercial auto insurance provides coverage if you use a vehicle for business purposes. It covers costs related to property damage or bodily injuries.

Without these extra coverages, 1099 Contractors risk bearing expenses from damages, endangering their small business or hard-earned company.

3 Rights of Contractors in Workers’ Compensation

Access To Medical Care And Treatment

Employed Contractors injured can receive prompt and appropriate medical care for their work-related injuries or illnesses. 

This may include coverage for doctor’s visits, hospital stays, surgeries, medications, physical therapy, and other necessary treatments. 

The workers’ compensation insurance typically pays for these medical expenses directly.

For example, if an employed contractor sustains an injury while working on a construction site, they are entitled to medical attention to address their injury promptly.

Compensation For Lost Wages

Employed Contractors who cannot work due to work-related injuries or illnesses are entitled to compensation for lost wages.

This typically covers a portion of the employed contractor’s average weekly earnings, helping to replace income lost during the period of disability. 

The amount of compensation varies depending on factors such as the severity of the injury, the contractor’s average earnings, and local laws.

workers compensation contractors
Contractors can receive medical care for their work-related injuries or illnesses.

Legal Protections Against Retaliation

Employed Contractors have the right to file a workers’ compensation claim without fear of retaliation from their employer or the company they are contracted with. 

It’s illegal for employers to retaliate against employed contractors for seeking workers’ compensation benefits, such as by terminating their contract, reducing their pay, or taking other adverse actions against them.

For example, an employed contractor working for a technology company develops repetitive strain injuries due to the nature of their work. 

The contractor files a workers’ compensation claim to cover medical treatment and lost wages. 

Despite this, the company threatens to terminate the contractor’s contract if they pursue the claim further. 

In this scenario, the employed contractor is legally protected against retaliation for exercising their workers’ compensation benefits rights. 

If the company proceeds with termination, the contractor may have grounds for legal action.

Obligations Of Employers Towards Contractor Workers’ Compensation

Employers have several obligations towards employed contractor workers’ compensation to ensure the well-being and protection of workers. Here are the key obligations:

Provide A Safe Work Environment

Employers must ensure the safety of contractors’ workplaces. This means preventing accidents and removing hazards harming workers. 

For example, if needed, they should provide safety gear, such as helmets or gloves, and ensure equipment is in good working condition.

contractors workers comp
Employers must purchase workers’ compensation insurance.

Report Workplace Injuries Promptly

When a workplace injury occurs, employers must report it promptly to the appropriate authorities, such as the workers’ compensation board or insurance provider. 

Prompt reporting ensures injured workers receive timely medical treatment and benefits and helps investigate the incident to prevent future accidents.

By fulfilling these obligations, employers can help ensure contractor workers are protected and supported in the event of work-related injuries or illnesses.


In conclusion, ensuring contractor workers’ compensation is crucial for workers’ well-being and businesses’ success. By providing adequate compensation and support for contractors, we fulfill our ethical obligations and foster a safer and more sustainable work environment. 

This protects workers from financial hardship in the event of injury and safeguards businesses from potential legal and financial repercussions. Ultimately, prioritizing contractor workers’ compensation is a win-win scenario, promoting fairness, safety, and stability for all involved parties.

To learn more about managing HR matters effectively, including contractor compensation, explore ERA for valuable insights and knowledge sharing.

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