Every so often, we hear a comment that perfectly reflects how ingrained traditional assumptions about work and coverage have become.

A general counsel at a leading healthcare platform recently noted that independent contractors “aren’t eligible for workers’ compensation.” It’s an understandable view – one that stems from how workers’ comp has long been structured and described. But it’s also incomplete.

The reality is that while workers’ compensation is typically arranged by an employer for their employees, independent contractors can carry workers’ comp in their own name and increasingly, they should.

The misconception runs deep

For decades, workers’ compensation has been described as something employers provide to their employees. That’s true in the traditional W-2 context. But it’s not the whole story.

In every state, an independent contractor can carry a workers’ compensation policy in their own name. Doing so ensures they’re protected if injured on the job, while also protecting the company that hires them from injury-related claims or reclassification risk.

Put simply: workers’ comp isn’t exclusive to employees. It’s a structure that covers people performing work. The difference is only in who holds the policy, the employer or the contractor.

What this means in practice

When a contractor carries workers’ comp in their own name:

• They get the same essential protection employees do – medical care, lost wages, and peace of mind if something goes wrong.

• The contracting entity is protected from being pulled into claims or state investigations that often follow injuries involving uninsured contractors.

• Both sides maintain independence, without the need for expensive Employer of Record arrangements or payroll markups designed to “solve” compliance through reclassification.

It’s a cleaner, more modern way to manage risk and one that’s fully aligned with how today’s work actually happens.

Why this matters now

As the line between employment and independent contracting continues to blur, companies are realizing that compliance isn’t just classification, it’s coverage.

Workers’ comp, in this context, isn’t about redefining someone’s employment status. It’s about ensuring accountability and protection flow to the right place. The misunderstanding isn’t malicious; it’s a reflection of how slow regulatory and insurance language has been to catch up with how flexible work now operates.

A smarter way to think about protection

At 1099Policy, we’re helping legal and compliance teams reframe that thinking. Workers’ compensation isn’t something to fear – it’s a tool to make independence sustainable. When contractors own their coverage, companies can finally stop choosing between compliance risk and operational efficiency.

The result?

A system that’s more transparent, fair, and financially sound for everyone involved.

Photo by NordWood Themes on Unsplash