Do 1099 workers need their own workers comp?

If they are genuinely independent, yes, because nobody else’s policy covers them. A true contractor is running their own business and carries their own coverage, and the businesses that hire them will ask for the certificate. A contractor with no employees can buy a policy that covers nobody, which exists precisely to produce that certificate and keep their pay off the hiring business’s audit.

Will my workers comp cover a 1099 contractor if they are hurt on my job?

If the state decides they were really your employee, yes, and it will. The policy covers whoever the law says was your employee, not whoever your bookkeeping says was one. An injured worker has every incentive to claim employee status, and an auditor or a judge applying the state’s test usually agrees. The claim is paid under your policy and counts against your record. If you had no policy at all, the worker can sue you directly instead.

I only use 1099 contractors. Do I need a workers comp policy at all?

Almost always, yes. A business with no employees on paper usually has some in fact, because the people it pays on a 1099 work under its direction doing the work it sells. Beyond that, most clients and general contractors require a certificate from you regardless of how you staff, and a policy of your own is the only way to produce one. The premium on a business with little true payroll is small, and the exposure without one is a lawsuit with no policy behind it.

What does the audit do with the money I paid to contractors?

It asks for a certificate for each one. Where there is a certificate showing the contractor carried their own workers comp for the period they worked, their pay is set aside. Where there is not, their pay is added to your payroll at the class rate that fits the work they did, and the additional premium is billed after the policy year ends. The auditor works from documents, so a sub who was insured but never sent proof is treated as uninsured.

I am a 1099 contractor and a general contractor wants a certificate from me. What do I buy?

A workers comp policy in your own name. If you have no employees, the policy can exclude you as the owner and cover nobody, and it will still produce the certificate the general contractor needs to keep your pay off their audit. If you have a helper, even a part-time one, the policy needs to cover them and the price follows their payroll. Either way it is the document that gets you onto the job.

Does the answer change outside California?

The test changes and the shape does not. Every state decides employee status on its own rules, some with a test like California’s ABC test and others with a control test closer to the IRS’s, and a few exempt very small employers from carrying comp at all. In all of them the tax form is not the deciding fact, an uninsured subcontractor is picked up at audit, and a worker the state calls an employee is covered by the hiring business’s policy or, if there is none, can sue the business directly.

A Latino landscaping contractor in his fifties at the tailgate of a work truck at first light, reading a subcontractor’s paperwork on a clipboard while two crew members unload mowers behind him

Does workers comp cover 1099 contractors, and does an independent contractor need their own?

Workers compensation covers employees, and a 1099 does not decide who is one. The state decides, using its own test, and in California the test starts by presuming the worker is your employee. A true independent contractor with their own business, their own tools and their own clients is not covered by your policy and needs their own. A worker you direct, who works only for you, is your employee whatever the tax form says, and if they are hurt your policy responds and your audit bills for them. The expensive version is the sub who cannot produce a certificate, whose pay lands on your policy at audit either way.

Call/Text(626) 344-2158

Three on the crew. One certificate.The other two are your payroll at audit, whatever the tax form says.

/ Start here

Tell us the situation.

One licensed human replies the same business day — not five agents, not an auto-responder. If the policy you have is already the right one, we will tell you.

We use this to quote and service your insurance, and we do not sell it or pass it to lead networks. Privacy policy.

/ Don’t want to read all this?

Send us what you have. We’ll tell you if it’s right.

Your current policy paperwork, a renewal notice, or nothing at all. A licensed agent reads it and replies the same business day.

Have it reviewed Call/Text(626) 344-2158

The detail

California starts from the assumption that every worker is an employee. To treat one as an independent contractor the hiring business must prove all three parts of the ABC test, that the worker is free from its control and direction, the work is outside the usual course of its business, and the worker is customarily engaged in an independently established trade or business.
California Department of Industrial Relations
A worker performing services that require a contractor’s license in California is presumed to be an employee rather than an independent contractor, and a person doing licensed work without holding the license cannot be an independent contractor at all.
California Labor Code section 2750.5
The IRS decides employee or contractor on three things, behavioral control, financial control and the type of relationship, and a business that treats an employee as a contractor without a reasonable basis becomes liable for the employment taxes on that worker.
Internal Revenue Service
An employer that has not secured workers compensation for an injured employee can be sued by that employee for damages in civil court, as though the workers comp system did not exist.
California Labor Code section 3706
At the audit that closes every workers comp policy, a subcontractor who cannot be shown to carry their own coverage is treated as your employee. Their pay is added to your payroll at your class rate and billed after the fact, and an injury to them lands on your loss record.
Kevin Kelsey, agency audit and placement experience
A contractor with no employees can carry a workers comp policy of their own to satisfy a general contractor or a client who requires a certificate. It costs little because it covers nobody, and it is the reason a sole proprietor can be hired at all by a business that checks.
Kevin Kelsey, agency audit and placement experience

What this means for you

The tax form is not the test. A 1099 records how you paid somebody. Whether they are your employee is decided by the state’s test, and a worker you schedule, supervise and pay by the hour to do the thing your business does is an employee on every test in use. Calling them a contractor changes the paperwork, not the answer.
An uninsured sub is your payroll at audit. The auditor does not ask whether your subcontractor was really independent. They ask for the certificate. No certificate means their pay is added to yours, rated at your class, and billed after the job is closed and the money is spent. Collect the certificate before the first day of work, not the last.
A hurt contractor becomes an employee at the worst moment. The injured worker you called a contractor has every reason to argue they were an employee, because an employee gets benefits. If they win, your policy pays and the claim sits in your experience mod for three years. If you have no policy, they sue you directly, and the law lets them.
Licensed trades in California have no gray area. Anyone doing work that needs a contractor’s license is your employee unless they hold the license themselves. An unlicensed framer, roofer or electrician on a 1099 is an employee by statute, and no contract between you changes that.
Report the pay you cannot certificate up front. If you know some of your subs will never produce a certificate, put their pay in your payroll estimate when the policy is written. The rate is the same either way; the difference is whether you pay it monthly or all at once at audit, with the surprise.
If you are the contractor, the certificate is what gets you hired. A general contractor who checks certificates will not put you on the job without one, whether or not you have employees. A policy of your own is the answer, and a policy that covers only you is inexpensive because there is nobody to cover.

Go deeper on any of these

Need this handled?

Reading about it and having it handled are different jobs, and the second one is ours. We place the accounts other brokers decline — claims history, a cancellation, an unusual operation, a business nobody wants to underwrite twice — and we will tell you when the policy you already have is the right one. Tell us the situation and a licensed human replies the same business day.