By Hannah Sullivan, insurance expert, pogo
Workers’ compensation insurance is a form of coverage that protects business owners and their employees should they get injured or fall ill due to work-related activity.
Solar contractors face liabilities every day that could result in injury. You might lift too many modules at once and face a back injury. You might lose your balance and take a tumble off the roof you’re working on. You could injure your finger while securing the mounting.
That’s why workers’ compensation insurance is so important for solar contractors.
What does workers’ comp cover?
With a workers’ compensation policy, you will not have to pay for medical costs resulting from a work-related injury out of pocket. Your policy will cover the medical bills, as well as funeral expenses in the unfortunate event you or an employee die. If you or an employee require time off work to recover, lost wages will be supplemented.
Employers’ liability, a component of workers’ compensation insurance, protects your business financially from claims regarding negligence or an unsafe work environment. Should an employee file a lawsuit, attorney’s fees, settlements and other court costs will be covered by your workers’ comp policy.
Who is eligible for workers’ comp insurance?
All businesses are eligible for workers’ comp. Whether you are a one-person solar contractor with no employees or a larger operation with dozens of employees and solar projects, we recommend this coverage to keep you and your solar business safe.
Business entities that are eligible for workers’ compensation include:
- Sole proprietors
Why do I need workers’ comp?
If you want to protect yourself, your employees and your solar operation physically and financially, you need workers’ comp coverage. Without this policy, if an accident occurs, you will be held responsible. You will have to take money from your business or your personal pocket to pay for you or an employee’s injury.
Paying for workplace accidents can be very costly. Having to pay for damages out of your personal or your business account can potentially put you out of business. With workers’ compensation insurance, you (and your business) will be financially protected.
What are workers’ comp requirements?
You may be required to have workers’ compensation insurance by the state, or by the party that is hiring you.
Whether the party hiring you is a general contractor or a homeowner, they may require you to have a Certificate of Insurance in order to work for them. Many hiring parties mandate proof of insurance to take the liability off of themselves.
How do workers’ comp requirements vary by state?
If you have employees, many states will require that you have workers’ compensation insurance. However, sometimes there are minimum requirements. For example, if you work in Alabama and have fewer than five employees, you are not required to have workers’ compensation insurance.
Just because you are required to have coverage because you have employees doesn’t necessarily mean you are required to have coverage for yourself. Some entities have the option to exclude themselves from coverage, which would lower their insurance premium.
But, keep in mind: Just because you are not required to provide workers’ compensation insurance for your employees doesn’t mean you will not be responsible in the event of an employee injury. Employers are almost always held liable for their employees. If you have employees and do not have coverage, be prepared to foot the bill if someone gets hurt.
How is workers’ comp different than health insurance?
When you think about getting hurt, two insurance coverages often come to mind: Workers’ compensation insurance and health insurance. But having one, and not the other, can be tricky.
If you have workers’ comp, but end up tripping on the sidewalk and fracturing your ankle outside of work, your workers’ comp policy would not pay the damages. You would need health insurance to cover a personal medical expense. The reverse is also true: If you lose your balance while securing a microinverter to racking on your jobsite and break your wrist, your health insurance may not pay the medical bills. In order to be compensated for work-related injuries, you would need a workers’ comp policy.
How is workers’ comp different than accident insurance?
While workers’ comp coverage is limited to accidents that occur while working, accident insurance provides you 24/7 protection on or off the job. Regardless of whether or not you have health insurance or workers’ comp insurance, this policy helps pay medical and non-medical expenses that result from an accident. Accident insurance stays with you so even if you change jobs, your policy remains the same.
The great thing about this coverage is that its month to month, with no commitment. And, accident coverage is very affordable at less than $20 per month.
What type of workers’ compensation insurance do I need?
It depends on what you do, where you live and how many employees you have. If you are a one-person solar contractor with no employees, you may only need a minimum premium workers’ comp policy, commonly referred to as a ghost policy.
Ghost policies are essentially the most affordable form of workers’ compensation on the market. They provide the owner their Certificate of Insurance, while excluding them from coverage. This makes it easy to get hired, and helps you save money. Pogo’s ghost policy is unique, because it is combined with a bonus accident policy, which provides 24-hour accident coverage.
If you are a larger solar company, a traditional workers’ comp plan may be the right fit for you. Regardless of whether or not you include yourself in coverage, your employees will be covered. Workers’ compensation is all about managing risk.
Not sure what type of workers’ compensation insurance is best for your business? Speak with an expert to learn about what level of coverage is right for you.
How much does workers’ comp cost?
Workers’ compensation insurance rates depend on many factors. The minimum premium (which is the lowest price available) for many states is $750 for an independent contractor.
What determines the cost of my workers’ comp policy?
Workers’ comp rates also depend on what you do, where you live and how many employees you have. Because this form of insurance is based on payroll, the more employees you have, the greater the cost of your insurance policy.
If you have had workers’ compensation insurance previously, your MOD (which is based on your loss history) will also play a factor in determining workers’ comp cost.
An additional factor is the expense constant, which covers administrative fees. Usually, this fee is around $200.
Check out this workers’ comp cost analysis to learn more about workers’ compensation insurance rates.
How can I save money on workers’ compensation rates?
Looking for affordable workers’ compensation insurance? Consider a ghost policy. It is the most affordable workers’ comp policy on the market.
- Minimum premium workers’ comp policy
- Owner is excluded
- Bonus accident policy with 24-hour accident coverage
Need additional forms of insurance for solar contractors?
Take a look at these recommended insurance coverages for contractors.
Hannah Sullivan is the co-founder of Pogo Insurance, a business insurance platform for independent contractors. Pogo compares rates from over 30 insurance companies to provide contractors the best coverage at the right price. Get a free estimate here.