Do I need workers comp if I only have part-time employees?

In most states, yes. The requirement is based on the number of employees, not their hours. Part-time, seasonal, and temporary W-2 workers typically count toward state employee thresholds. Verify your specific state's rules with your state Division of Insurance.

What does workers comp not cover?

Workers comp does not cover: injuries to 1099 independent contractors, injuries that occur outside the course of employment, intentional self-inflicted injuries, and in most states the owner themselves unless coverage is elected. It also does not cover property damage or third-party liability.

What is an Experience Modification Rate (EMR) and how do I improve mine?

The EMR is calculated by NCCI or your state's independent rating bureau and compares your actual loss history to the expected losses for similar businesses. An EMR below 1.00 saves premium; above 1.00 increases it. Improve your EMR by reporting claims promptly, facilitating return-to-work programs, and building a documented safety culture.

Can I get workers comp for just one employee?

Yes. Many carriers will write a policy for a single employee. Carriers like Employers Holdings and Next Insurance specialize in micro-accounts. Expect a minimum annual premium of roughly $500–$1,500 depending on the trade.

What is pay-as-you-go workers comp?

Pay-as-you-go workers comp ties your premium payments to your actual payroll each pay period rather than requiring a large upfront deposit. Your payroll processor reports payroll to the carrier and premium is debited accordingly, reducing cash flow strain and minimizing year-end audit adjustments.

What happens at a workers comp audit?

At the end of the policy period, the carrier audits your actual payroll against the estimated payroll used to calculate your deposit premium. If your actual payroll was higher you owe additional premium; if lower you receive a refund or credit. Audits can be conducted remotely or in person for larger accounts.

Does workers comp cover the business owner?

Sole proprietors and partners are automatically excluded in most states. Corporate officers may be auto-included or auto-excluded depending on state law. Owners who want coverage can elect to be included, which adds their payroll to the rating basis.

What's the difference between a waiver of subrogation and an additional insured on workers comp?

A waiver of subrogation means your workers comp carrier gives up its right to sue a third party (like a general contractor) to recover claim costs. Workers comp policies do not add additional insureds, but they do issue waivers of subrogation, a common contract requirement on commercial construction jobs.

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Best Workers Comp Insurance for Small Business

Author: Daniel Reyes, CPCU, Commercial Lines Specialist | Published: June 2026 | Last Updated: June 2026