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You're Probably Paying for Insurance You Don’t Even Need

If you have no employees or only work with 1099 contractors, read this before renewing your workers' comp policy.


Business owners across the U.S. are constantly told they must carry workers’ compensation insurance — even if they don’t have a single W-2 employee on payroll.


Sound familiar?


It’s become so common that many business owners are unknowingly paying for coverage they don’t actually need. If that’s you, this blog is about to save you time, money, and frustration.


✅ What Is Workers’ Compensation Insurance?


Workers’ compensation insurance covers medical expenses, lost wages, and rehabilitation costs if an employee gets hurt on the job. In most cases, it also protects the employer from lawsuits related to those injuries.


But here's the thing:


It’s designed for W-2 employees — not 1099 contractors.


❗ Why Are Business Owners Required to Have It?


Every state has its own rules. But generally, you’re required to carry workers’ comp if:


  • You have a certain number of W-2 employees (often just 1–5)

  • You work in high-risk industries like construction

  • The state believes your 1099s are really employees in disguise


So even if you're working alone or hiring subcontractors, you might still be told to get a policy.


🤔 What If You Only Have 1099 Contractors?


Here’s where the confusion hits hardest.


If your workers are truly independent contractors, many states don’t require you to carry workers’ comp for them — but:


  • Your insurance carrier or the state may still demand proof they aren’t misclassified

  • You may be pressured into coverage unless your contractors are properly documented or exempt


🔄 What You Can Use Instead


If you’re only using 1099s, you can:


  • Require them to carry their own workers’ comp insurance

  • Have them sign a Certificate of Independent Contractor or Waiver of Coverage

  • File a waiver or exemption form for yourself or them (depending on state laws)


📝 What Is a Waiver of Exemption?


A Waiver of Exemption is a legal form that declares:

“I (or my contractors) do not need workers’ comp coverage under current state law.”

It’s commonly used for:

  • Business owners

  • Corporate officers

  • LLC members

  • Sole proprietors

  • Partners

  • Independent contractors (in some states)


By filing this waiver, you can avoid being forced into unnecessary insurance — and it can reduce your premiums significantly.


👥 Who Can File a Waiver?


You may be eligible if you are:


  • A sole proprietor

  • A partner in a partnership

  • An LLC member

  • A corporate officer

  • An independent contractor (varies by state)


📌 Final Note on 1099 Contractors


If you're hiring 1099s, protect yourself:


  • Ask them to show proof of insurance, OR

  • Have them sign a waiver or independent contractor agreement specific to your state


This protects your business from being held liable if they’re hurt while working for you.


📂 Where to Get the State-by-State Waiver Guide


I've put together a comprehensive state-by-state guide that breaks down:


✅ What’s required in each state

✅ Who can legally opt out

✅ Where to get the waiver forms

✅ How to submit them


🔒 This guide is exclusive to our Momentum Membership Community and is now posted on the member community board.

If you're not a member yet and you're serious about building your business the right way, it’s time to get in the room.


👉 Need help or want access to the guide?


Click below to join the Momentum Membership and unlock:


  • 🔓 The full State-by-State Waiver Guide

  • 🧭 Step-by-step instructions on how to get your waiver

  • 📤 Detailed steps on where and how to file it properly

  • 🧠 Live monthly training classes

  • 📁 Access to our private resource library

  • 👥 Real support from experienced business owners



Let’s stop wasting money and start structuring your business the right way.

 
 
 

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