Workers Compensation Insurance
49 U.S. states require employers to carry workers compensation insurance in case an employee gets injured on the job. Don’t let an accident trip you up — meet legal requirements and stay prepared for workplace accidents with affordable coverage from Insurance Canopy!
What Is Workers Compensation Insurance?
Workers compensation insurance provides medical and disability benefits to workers (aka employees of a business) who suffer from an injury or become ill due to a work-related incident.
This coverage is considered a “no-fault” policy because employees do not have to prove that their employer was at fault or negligent to receive compensation. Even if the employee’s own actions led to their injury, they are still covered under a workers compensation insurance policy.
Is Workers Compensation Insurance Required By Law?
Workers compensation insurance is mandatory for most employers in all states except Texas to cover employment-related injuries, illness, or disease.
Because each state has its own requirements, check with your state’s Department of Labor to see what the workers compensation insurance requirements are for your business. For example, some states require any business with at least one employee to carry this coverage, while others only require it if you have five or more.
What Does Workers Compensation Insurance Cover?
Workers compensation insurance covers costs associated with work-related illnesses and injuries. These expenses often include:
- Medical costs
- Lost wages
- Disability benefits
- Ongoing care
- Funeral costs
What It Doesn’t Cover
Typically, workers compensation policies will not cover the following:
- Injuries intentionally caused
- Money a court orders you to pay because of bodily injury to an employee working for you illegally (aka punitive and exemplary damages)
- Fines or penalties imposed for violating federal or state law
- Bodily injury occurring outside the United States, except for injury to a citizen employee who is temporarily outside the country
- Any obligation of yours imposed by an occupational disease, unemployment compensation, disability benefits law, or any similar law
- Damages arising out of coercion, criticism, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination against or termination of any employee, or any personnel practices, policies, acts or omissions
While these are common exclusions, please note that they may differ from your policy. Please refer to your policy for actual coverages, limitations, and exclusions.
Who Needs Workers Compensation Insurance?
In general, anyone with at least one employee should carry a workers compensation policy, including part-time and seasonal employees. However, exact requirements differ by state.
For example, Texas does not require private employers to carry workers compensation coverage. In contrast, Florida requires it for construction companies with at least one employee and non-construction companies with four or more employees.
Understanding your state requirements for self-employed individuals, volunteers, interns, and independent contractors is vital. Penalties for violating these requirements carry hefty fines and legal action that can place a financial strain on your business.
Professionals who may need workers compensation insurance include but are not limited to:
Don’t see your business or industry here? Find out more about the types of businesses Insurance Canopy insures.
Real Examples of Workers Compensation Claims
A woman working in a job that involved heavy lifting injured her lower back while carrying a box, which required expensive surgery. Total payout: $1,016,944
A tile setter who ran his own business suffered a back injury on the job that led to multiple different medical treatments and evaluations. Total payout: $490,000
An employee was seriously injured in a car accident while driving for work, which resulted in hospital stays and medical treatment. Total estimated payout: $89,000
How Much Does Workers Compensation Insurance Cost?
The median cost of workers compensation insurance from Insurance Canopy is $1,255 per year, but this number can vary greatly depending on the following factors:
- The type of business you run and your industry (aka your class code)
- Your payroll and the number of employees working for you
- The risks each employee faces based on their job duties
- How long you’ve been in business (aka your experience rating)
- Your claims history (aka your loss experience)
Additional Coverage You May Need
Work-related injuries are a risk most businesses need to be ready for, but they aren’t the only claims you can face. To properly shield your finances from the impact of accidents ranging from third-party injuries to defamation suits, we offer several essential small business insurance coverage coverage options:
How to Get Your Free Quote
You don’t even have to leave the house to get your free workers compensation insurance quote from Insurance Canopy. Fill out our online application with all the required information about your business and we’ll send your quote right to your email inbox!
To speed up your application process, make sure you have this information at the ready:
- Your business’ legal status (sole proprietorship, LLC, etc.)
- Your federal employer ID number
- Your annual payroll
- The number of employees on your payroll (both full-time and part-time)
- Information about any owners, partners, or relatives you want to include or exclude from coverage (birthdate, relationship to you, ownership percentage, payroll, etc.)
Why Small Businesses Love Insurance Canopy
With Insurance Canopy, you get A+ rated insurance at an affordable price, meaning you don’t have to pay an arm and a leg for the coverage you need. See what our customers have to say about us!
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They provided clarity on the importance of insurance for a first time business owner in the cleaning space and provided clear insight next steps and options for coverage.
Evergreen Multiservices
February 2, 2026Extremely user friendly website, super affordable and very little time needed to apply.
Carl Sari
January 31, 2026Excellent company, Great service, the best!!!
Claudina Adams
January 15, 2026 -
Super affordable insurance for a small business like myself super happy to be able to provide this to my customers really helps of landing more gigs
Alex
January 5, 2026Really went the extra mile to find the appropriate coverage for my business.
Daisy B
January 2, 2026Canopy provided escatly what I neede to book the gig, and at a very affordable price.. Thank You!
Andy Anderson
December 22, 2025 -
Easy. Convenient. Trustworthy. Came thru in a moments notice
Eddie K
December 19, 2025Affordable liability insurance for DJ's. Easy to set up and understand. I've been with them for several years and am happy with their service.
Peter Flessas
December 14, 2025So easy to sign up. I hope I never have to use the insurance portion but most hotels require it for corporate gigs
Yuri Gonzalez
December 11, 2025 -
This company is great. They are very helpful and they have great prices for insurance options that cover what you need!
Jacob Serrano
December 6, 2025Great experience, quick and easy to understand with what I needed for my business. Highly recommend!
FrankLynn Rae
October 28, 2025Very helpful customer service! Prompt, punctual, effective! No bots or long waits to get assistance.
Maria Ciccone
October 19, 2025 -
Canopy insurance has made affordable, band insurance needed for major venues. Thank you for your fast and easy service Stan Zizka's Del Satins
stan zizka
October 5, 2025Getting a vendor policy was quick and fairly priced compared to other quotes.
Kristine Fullerton
October 3, 2025Thank you so much
Steve Monreal
July 11, 2025 -
I needed a portable policy as a yoga instructor. I found this company in an online search. Called and got details from them, was quite surprised at how affordable... Read More
Jamie Calaway
July 4, 2025Very easy & quick experience. We got insurance in no time with no hassle. Thank you!
Robert Earnest
July 4, 2025I am glad I went with them. I needed a last minute policy to cover an event I was doing and they had exactly what I needed at a... Read More
Deloris Pacheco
June 27, 2025 -
Very easy to renew policy
Elyce Nissinoff
June 18, 2025Representative Sarah was very helpful. Walked me through every step and not to mention the price even matched the service! Would recommend to any and everyone.
queenkiam
June 18, 2025Would have 5 starts, but not right now. This is the first time I have ever had to pay for an additional insured ever in 20 year's. They either have... Read More
Anthony Burgess
June 18, 2025 -
Very user friendly platform. Multiple options. Very good pricing. Needed liability insurance in order to secure a very good paying event for my solo tribute show. Was set up within... Read More
Michael Riley
June 18, 2025Needed DJ insurance for Memorial Day weekend & was squared away within an hour for 2 events! Highly recommend
Jay Solis
June 18, 2025What a lovely experience I had with Insurance Canopy! Easy and fast sign up, great policy, matches my needs as a self-employed business owner. Highly recommend!
Masha Rusanov
June 18, 2025 -
great little company, with fair pricing, for entertainers who need occasional coverage. however, they have long hold times to speak to an agent, and their customer service left a little something... Read More
Gretje Angell
June 18, 2025Provides event insurance at a very reasonable price compared to other companies. Easy to purchase and provide proof of insurance.
David Fox
May 18, 2025They can help.you with the right Insurance you need, and the lowest price
Alvaro Baltazar
May 18, 2025 -
everything is excellent
Radames Martinez
May 18, 2025Extremely affordable event insurance and an easy to work with system and team that will advise you every step of the way!
Ishan Arvin
May 18, 2025Affordable for dance & yoga folk. Thumbs up!
Maia Claire
May 18, 2025
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They provided clarity on the importance of insurance for a first time business owner in the cleaning space and provided clear insight next steps and options for coverage.
Evergreen Multiservices
February 2, 2026 -
Extremely user friendly website, super affordable and very little time needed to apply.
Carl Sari
January 31, 2026 -
Excellent company, Great service, the best!!!
Claudina Adams
January 15, 2026 -
Super affordable insurance for a small business like myself super happy to be able to provide this to my customers really helps of landing more gigs
Alex
January 5, 2026 -
Really went the extra mile to find the appropriate coverage for my business.
Daisy B
January 2, 2026 -
Canopy provided escatly what I neede to book the gig, and at a very affordable price.. Thank You!
Andy Anderson
December 22, 2025 -
Easy. Convenient. Trustworthy. Came thru in a moments notice
Eddie K
December 19, 2025 -
Affordable liability insurance for DJ's. Easy to set up and understand. I've been with them for several years and am happy with their service.
Peter Flessas
December 14, 2025 -
So easy to sign up. I hope I never have to use the insurance portion but most hotels require it for corporate gigs
Yuri Gonzalez
December 11, 2025 -
This company is great. They are very helpful and they have great prices for insurance options that cover what you need!
Jacob Serrano
December 6, 2025
FAQs About Workers Compensation Insurance for Small Businesses
Who Can Purchase Workers Compensation Insurance from Insurance Canopy?
You can purchase a workers compensation policy from us if you live in any state except North Dakota, Ohio, Washington, and Wyoming. If you live in one of these four states, you are not allowed to get this coverage from a private insurer and must purchase it from a state fund instead.
How Can I File a Claim for Workers Compensation Insurance?
To file a workers compensation claim, document the incident in an injury report and file a claim by following these steps:
- Log in to your user dashboard
- Go to “Manage Policies” and click on “File a Claim”
- Complete each field with information about your claim and submit
Injured employees are often legally required to report workplace injuries within a certain timeframe (usually 24–72 hours).
You may also be required to use state-specific workers compensation claims forms and posting notices. Refer to your state for these requirements.
Does Workers Compensation Cover Self-Employed Workers?
If you are self-employed with no employees or uninsured independent contractors, you may not need workers compensation insurance, depending on the state where you live. Always check your state laws for exact requirements.
Are Independent Contractors Covered Under My Workers Compensation Policy?
Independent contractors are generally not covered under your workers compensation policy. Typically, there needs to be an employer-employee relationship for someone to be eligible for coverage.
However, if the independent contractor does not meet the definition of an “independent contractor” or doesn’t carry their own workers compensation coverage, you could be liable for their work-related injury or illness.
What Benefits Do Injured Workers Receive
Some of the benefits available to employees under a workers compensation policy include:
- Coverage for medical treatment (doctor visits, hospital stays, physical therapy, etc.)
- Disability benefits (fully or partially replacing lost wages)
- Job placement assistance (if the employee can no longer perform the duties of their job due to injury)
Additionally, if an employee dies on the job, their spouse and/or dependents can receive financial compensation for funeral/burial costs as well as loss of companionship (aka loss of consortium).
Are My Employees Covered When Working in Other States?
If you have employees working in other states, notify your insurance carrier. These states will need to be added to your policy’s declaration page.
If employees work temporarily in another state, your existing workers compensation policy may automatically provide coverage for a work-related injury. “Other State Insurance” provisions are designed to provide coverage for employees working in states not specifically listed in your policy.
Always refer to your policy or speak with your insurance carrier to confirm the scope of your coverage.
Workers Compensation Resources
Chris Van Leeuwen | VP of Agency Development
Chris Van Leeuwen is the VP of Agency Development for Insurance Canopy. He has held the prestigious Certified Insurance Counselor (CIC) designation since 1996.
Because he strongly believes in the importance of helping business owners understand their insurance coverage, Chris uses his wealth of experience to offer insights to small business owners across the country who are looking to navigate business liability insurance.
Chris Van Leeuwen is the VP of Agency Development for Insurance Canopy. He has held the prestigious Certified Insurance Counselor (CIC) designation since 1996.
Because he strongly believes in the importance of helping business owners understand their insurance coverage, Chris uses his wealth of experience to offer insights to small business owners across the country who are looking to navigate business liability insurance.