Worker's Compensation and Employer's Liability Insurance?

[ear]

I've just started a sole proprietorship that is a consulting company. Do I need this insurance? I have no employees and do not plan to have any. If I do need it, approximately how much will this cost?

[porter]

Legally, you probably do not need it. Contractually, most of the companies you want to do business with, will NOT let you on their premises or do business with you, unless you actually carry it.

As far as cost, there's a "minimum premium" and it's based on what your payroll is, and what your class code is. You have given absolutely NO indication of what type of consulting you do, or what state you are in. It could be $500, if you do accounting type consulting, or $25,000, if you do offshore drilling consulting. Those are the minimum premiums for those two types of businesses.

[adamka]

As a matter of law because you have no employees you would not be required to carry worker's compensation. However, because you are a consultant you will likely be working with clients who will impose minimum insurance requirements before they will contract with you for your services. Those requirements can be minimum limits of general liability, perhaps professional liability coverage and worker's compensation. The client will require that you provide a certificate of insurance that meets those requirements. In my years as an agent I wrote many minimum premium policies for sole props. that had no employees for that reason.

Check with the agent that writes your business insurance he / she can place the policy with your business insurer.

[kirklin]

Laws Vary by State

"I have no employees and do not plan to have any"

As long as you do not have employees OR hire subcontractors, no you don't. If you hire subcontractors to work on your jobs, you might (probably will) have to get Worker's Comp Insurance. Check with your insurance agent to make sure you comply to your state's laws.