Do I have to carry workers' comp insurance for 1099 vendors?

Most insurance companies will require that you provide worker's comp insurance for anybody you issued a 1099 for, unless you have a certificate of insurance from them showing they had their own coverage. Since policies are not required for sole proprietors with no employees of their own, they often won't have their own coverage. Rates are generally very low for people who provided clerical or similar work, but can get quite high for other categories with more risk of injury. Your insurance audit will ask that you list out what you paid subcontractors; however, you do NOT have to cover materials or reimbursements, so make sure any bills you get show those expenses separately, and track them separately in your books.

More Information: Employee vs. Subcontractor: What’s the Difference & Why You Should Care

Tagged With: 1099 Subcontractors,  Workers' Compensation Insurance