Myth: I don’t need to cover my independent contractors with Workers’ Compensation Insurance.
Fact: ANYBODY who works for you is required by law to be covered by Workers’ Compensation.
I’ve heard every excuse when it comes to Workers’ Comp:
- “It’s too expensive!”
- “My employees sign waivers, so they don’t need coverage.”
- “I’m only shooting for a couple of hours!”
However, the excuse that I hear the most, BY FAR, in the entertainment and production industry is this one:
- “I don’t need Workers’ Compensation Insurance because I use independent contractors.”
Workers’ Compensation – It’s the Law!
Look, I understand the confusion. I really do. If they just work for you for a few hours or a few days, and you give them a 1099 as an independent contractor, they’re not really your employee, right? I mean, the word “independent” is right there in the title, so you shouldn’t have to cover them, right? Wrong!
Anybody who works for you, whether they’re an independent contractor, volunteer, intern, part-time employee or full-time employee, are required by most state’s law (including California) to have Workers’ Compensation coverage. It also doesn’t matter how you pay them. Pay them in cash, check, a payroll service, or don’t even pay them at all, they still need coverage under a Workers’ Comp policy.
The Risks of Not Purchasing Workers’ Comp Coverage
So what happens if you don’t buy the coverage? Well, we’re not going to rat you out to the state or anything. We’ll even sell you a Short Term Production Policy or Annual Production Policy without the coverage if you want. However, if anything happens to one of your employees and you do not have Workers’ Comp, then you run the risk of them taking you to court. If that happens, you can bet you will lose.
It won’t even be close.
The law requires you to purchase the coverage, so if you’re found involved in a claim without a valid Workers’ Compensation policy then you’ll pay for the hospital and rehab bills out of your own pocket. You even risk getting a fine from the state for hiring employees without Workers’ Compensation Insurance.
There are NO Loopholes!
Don’t think you can have your employees sign waivers, either. There are only a select few states that allow Workers’ Comp waivers to be signed so that the employee can legally opt out of the Workers’ Comp coverage. However, most production-heavy states do not offer this option (California, New York, Georgia, etc.) and they are only valid if offered by the insurance company directly. If you write up your own waiver and hope the insurance company and/or state government will honor it, you’re wrong.
It’s definitely in your best interest to get Workers’ Comp. If you’re reading this right now and thinking “Hey, I’ve hired a few guys recently and had no idea, they needed Workers’ Comp,” then consider this your wake-up call!
(This article was originally published in 2016 and has been updated with new information.)
Call Equipment & Production Insurance
If you need more information on Workers’ Compensation Insurance then give us a call. Here at Equipment and Production Insurance, we want to help you see your business succeed.
Call us today with any questions you have, and let us help you choose the insurance that is right for you.