What Is Workers’ Comp? 

Workers’ compensation, or workers’ comp, is a type of state-mandated insurance that provides financial support to employees who suffer injuries or illnesses on the job. It typically covers: 

• Medical bills for work-related injuries 

• Lost wages due to injury 

• Rehabilitation and physical therapy costs 

• Disability benefits (temporary or permanent) 

• Death benefits for families in case of work-related fatality 

If you’re running a home services business, workers’ comp can be the safety net that keeps you in business and running smoothly, even if the unexpected happens. 

 

Do I Need Workers’ Comp for My Home Services Business? 

Whether you’re a solo handyman or own a growing plumbing or electrical business, you may need workers’ comp insurance. Workers’ comp laws vary by state, and compliance may change based on how many employees you have. That said, here are some factors to consider: 

• Are you hiring other techs or apprentices? You’ll likely need workers’ comp insurance. 

• Only using subcontractors? You might still be liable if they’re misclassified. 

• Doing business in construction-heavy states like California or New York? Requirements are strict—even for part-time help. And yes, even if your workers are part-time, many states still require that you carry workers’ comp. Ignoring your state’s requirements could lead to hefty fines or worse—getting sued if someone gets hurt. 

 
🔍When in doubt, look it up! Consult the officials of your state’s labor department to find out what’s required of your business by law. Visit the U.S Department of Labor’s website for a directory of every state’s workers’ compensation website and a list of officials.   

 

Workers’ Comp for Part-Time Employees and Contractors 

Part-time employees are common in the trades—seasonal help, weekend techs, or flexible hires to handle overflow jobs. But when it comes to workers’ comp: 

• Part-time workers are often still eligible for benefits—especially if they’re classified as employees. 

• Wage replacement might be lower due to fewer hours, but medical benefits are generally the same. 

• State laws vary, so don’t assume using a specific type of worker (part-time, contractor, or subcontractor) means you’re off the hook. 

If you’re unsure whether a worker qualifies as an employee or contractor, it’s smart to consult a legal or insurance expert—misclassifying workers is one of the most common and costly mistakes in the home services industry. 

 

Why Workers’ Comp Matters for Your Business 

It’s tempting to see workers’ comp as an extra business expense to avoid unless you’re legally required to have it, but it’s not that simple. Here’s a few reasons why workers’ comp is a smart investment: 

• ✅ Protects your business from costly injury lawsuits 

• ✅ Keeps your workers safe, covered, and loyal 

• ✅ Meets client expectations—many commercial clients won’t hire you without proof of coverage 

• ✅ Improves your credibility and professionalism 

Even if you’re just starting out or running a lean team, the cost of workers’ comp is a small price to pay compared to a legal battle or major unplanned medical expense. 

 

How to Get Workers’ Comp Coverage 

Getting started is easier than you think: 

1. Find a provider that specializes in small businesses or trades. 

1. Share info about your payroll, team structure, and work type. 

1. Get a quote, compare rates, and choose a policy. 

1. Keep it updated as you grow and hire more help. 

Not sure where to start looking for coverage? CoverHound helps contractors and small business owners in the trades find, compare, and purchase insurance online—offering competitive rates and coverage in all 50 states. 

Pro tip: A little preparation can go a long way. You might be able to lower your premium by implementing job safety training, maintaining a clean claims record, and making sure everyone’s job roles are classified correctly! 

 

Common Workers’ Comp Myths in the Home Services World 

Still not sure if you’re sold on workers’ comp? First, let’s clear up a few big misconceptions: 

• ❌ “It’s just me, I don’t need it” – In many states, even a sole proprietor with subcontractors needs coverage. 

• ❌ “Part-time means no coverage” – Actually, many states require coverage regardless of hours worked. 

• ❌ “My health insurance will cover it” – Workers’ comp is specifically for job-related injuries. Personal health insurance won’t cut it, and it definitely won’t help your business out of a lawsuit. 

 

If you’re a contractor or in the home services industry, understanding workers’ comp isn’t just about checking off a legal requirement—it’s about running a responsible, professional business that’s ready to weather an unforeseen storm. 

Whether you have a crew of full-time technicians or a few part-time workers, having the right coverage in place protects both your people and your bottom line. 

Need help getting started? Below are some helpful tools and resources to start you down the path. 

 

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Resources:  

U.S. Department of Labor: Look up your state’s workers’ comp officials and laws  

CoverHound: Easily find, compare, and purchase insurance online 

National Association of Home Builders: Safety Training Toolkit (including OSHA resources)