You work alone. No crew, no payroll, just you and your truck. So do you really need workers’ compensation? The honest answer for self-employed contractors is: legally, maybe not – practically, quite possibly yes. Here is how to think it through.
The Legal Baseline in Nevada
Nevada law requires workers’ compensation coverage as soon as a business has even one employee. A sole proprietor with no employees can generally claim an exemption by filing the appropriate affidavit. That exemption is real, but it comes with two important catches:
- It ends the moment you hire anyone – even a helper for a single weekend. Casual day labor has a way of becoming an “employee” in the eyes of the law precisely when something goes wrong.
- It only answers the legal question. It does nothing about the practical ones below.
Why General Contractors Ask for It Anyway
Many GCs require every sub to carry workers’ comp or provide a valid exemption form. The reason is audit math: when a GC’s insurance carrier audits their books, payments to subs without coverage documentation can be treated as payroll and charged against the GC’s policy. Some GCs simplify their lives by requiring actual coverage from everyone, exemption or not. If your best customers demand it, the exemption saves you nothing.
The Gap Nobody Talks About: Your Own Body
Here is the uncomfortable part. If you are exempt and you fall off a ladder, who pays?
- Your health insurance may cover treatment – subject to deductibles, and many health plans have exclusions or subrogation rights for occupational injuries.
- Nobody replaces your income. Workers’ comp pays disability benefits while you cannot work. Without it, a broken leg can mean three months of zero revenue while your bills continue.
For a one-person business, the owner’s body is the entire means of production. That is exactly the risk workers’ comp was designed to transfer.
Options for Owner-Only Contractors
- File the exemption and self-insure the risk. Reasonable if you have strong health coverage, disability insurance, and cash reserves.
- Buy a workers’ comp policy and include yourself. Sole proprietors can typically elect coverage. Premiums for owner-only policies are often modest, and it instantly satisfies GC requirements.
- Pair the exemption with an occupational accident or disability policy. A middle path that covers injury costs and lost income without a full comp policy.
Questions to Ask Yourself
Could you pay your mortgage after 90 days of no income? Do your target customers require comp regardless of exemption status? Do you ever – even occasionally – pay a helper? If any answer makes you wince, the exemption route is thinner protection than it looks.
Talk It Through With a Local Agent
What an Injury Actually Costs a Solo Contractor
Put numbers on the risk. A moderately serious ladder fall might mean an ER visit, imaging, a surgical repair, and twelve weeks off the tools. Health plan deductible and out-of-pocket maximum: several thousand dollars. Twelve weeks of lost billings for a contractor grossing $9,000 a month: $27,000. Ongoing overhead – truck payment, phone, insurance, license fees – continues regardless. Total damage: often north of $35,000 for an injury everyone would describe as “not that bad.” Workers’ comp exists to absorb exactly this math, which is why many owner-operators buy it even when the state says they do not have to.
Frequently Asked Questions About Self-Employed Workers’ Comp
How much does an owner-only workers’ comp policy cost?
Pricing keys off your class code and an assigned owner payroll figure. Light trades often find owner-inclusion surprisingly affordable; high-rate trades like roofing pay meaningfully more. A quote takes minutes and beats guessing.
Does health insurance make workers’ comp unnecessary?
No. Health plans cover treatment (with cost-sharing) but replace zero income, and some plans limit occupational injury coverage. Comp pays medical costs at no deductible plus wage-replacement benefits.
What is a ghost policy?
A workers’ comp policy where the owner is excluded and there is no employee payroll – bought purely to produce a certificate for GCs. It satisfies paperwork but pays nothing if you are hurt. Understand exactly what you are buying before choosing one.
If I hire my first helper, how fast must I add coverage?
Immediately – Nevada requires coverage from the first employee, including part-time and temporary help. Set up the policy before their first day, not after.
Does my Nevada exemption work in other states?
No – exemptions are state-specific, and neighboring states apply their own rules the moment your work crosses the line. Contractors working border markets like Laughlin, Mesquite, or Lake Tahoe should confirm requirements on both sides before mobilizing, because an exemption valid at home can be an uninsured violation twenty miles away.
My Policy Plug helps Nevada’s self-employed contractors weigh the exemption against real coverage, with actual numbers instead of guesswork. Call 702-444-2367 – a ten-minute conversation now beats a hard lesson later.
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