This is a pretty common question I get from our small business owners; whether or not you need to have a workers comp. policy or not. If you do an event and have a booth at a tradeshow, go on site to a client, or have a contract with a vendor, they’ve probably sent you a list of insurance requirements. This is going to spell out your general liability, auto insurance, and workers compensation requirements.
If you have a W2 employee then it’s pretty straight forward and you do need a policy. If you’re a sole proprietor who truly works by yourself and don’t have any payroll, then a policy is not required. Likewise if you’re an LLC or a corporation, you may either not need coverage, or may be able to exclude owners. A corporation can exclude owners and executives, and individuals with an ownership stake in the business (check with your carrier for requirements). It isn’t until there is a W2 employee on the payroll who isn’t part of the ownership structure that you need a policy.
Owner of Paul Nelson Insurance, and resident of Santa Cruz and Monterey counties for 30 years.