Independent Contractor Exclusion
Workers compensation typically does not cover true independent contractors; misclassification creates coverage and penalty exposure.
States use different tests (economic realities, ABC test) to distinguish employees from contractors. Misclassified workers denied WC may sue; employers face fines and back premiums.
Examples
A gig driver classified as contractor suffers injury; state finds employee relationship — employer owes WC benefits retroactively.
Common Misconceptions
Using a 1099 label alone to avoid WC. Failing to verify subcontractor certificates of insurance.
Related Terms
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Back to Glossary Claims Pages AcademyThis definition is provided for informational and educational purposes. Insurance terminology may vary by jurisdiction, policy, and context. Consult a licensed professional for guidance specific to your situation.
