Workers' comp for contractors: what design pros should know
If you're hiring subs or running a firm, understanding workers' comp is non-negotiable. Here's the primer.
Who needs it, and why
Workers' compensation insurance covers medical costs and lost wages for employees injured on the job. Most states require it as soon as you have a single W-2 employee, and many project owners require proof of coverage before you can bill — even for design-only work where field exposure seems minimal.
How it differs from professional liability
- Professional liability covers errors in your design or advice.
- Workers' comp covers injuries to people doing the work.
- General liability covers third-party injury or property damage.
A design firm that supervises any field activity needs all three — not because every project will use them, but because a single uncovered incident can dwarf years of premium.
The experience modifier
Your "experience mod" is a multiplier based on your claims history relative to peers. A mod below 1.0 means you pay less than average; above 1.0 means you pay more. Controlling claims — through training, documentation, and early reporting — is the single largest lever on long-term premium.
Subcontractor exposure
If you use 1099 subcontractors, you are often still on the hook if they are uninsured. Require certificates of insurance from every sub, and name your firm as an additional insured where the contract allows.
Where member pricing fits
ProRewards partner carriers offer member-rated workers' comp programs. The discount is modest in year one but compounds as your experience mod improves — and the quote is free, so it costs nothing to compare at renewal.