Does Workers’ Compensation Insurance Cover Independent Contractors?

Injured woman feeling down at her house.

When you are injured at work, while performing work duties, you are entitled to worker’s compensation benefits paid for by your employer’s worker’s compensation insurance. This approach to work injuries is intended to streamline medical and lost wage benefits to individuals injured at work. However, with a few exceptions, only “employees” of the employer are entitled to worker’s compensation benefits.

What Makes Me An Independent Contractor?

Under the Colorado Workers’ Compensation Act, the definition of “employee” does not include “independent contractors.” In determining whether an injured individual is an employee or independent contractor there is often not a clear-cut answer. To examine these situations we examine multiple factors. Those factors are:

  1. Whether or not the individual works exclusively for the employer.
  2. Whether there are quality standards for the individual (other than plans and specifications of the work to be performed).
  3. Whether the individual is paid at a fixed or contract price.
  4. Whether the contracted services can be terminated during the contract only if the individual violates the terms of the contract or fails to meet contractual specifications.
  5. Whether the individual receives minimal or no training from the contracting party (i.e. the person or company paying for the services).
  6. Whether the contracting party provides nothing more than the materials and equipment necessary to complete the job.
  7. Whether the individual determines the time of the performance.
  8. Whether payment for the contracted services is made to a trade name or business entity.
  9. Whether the business operations of the injured individual and the contracting party are separate and distinct.

The easy scenarios are those where the answers to the above factors are all the same.
For example, an individual is an independent contractor when the individual works for multiple contracting parties, sets the quality standards on the work, is paid at a fixed or contract price, cannot be terminated at will, receives little to no training from the contracting party, nothing more than materials and equipment are provided by the contracting party, decides when the job will be completed, is paid in a trade name, and has separate business operations from the contracting party.

But, what if you are an individual who works exclusively for one employer but you are paid via a 1099 tax form? What if you work for one employer, you received no training because you have the experience, you set your schedule, and handle quality control, but you are paid in your personal name? The situations are endless and each one will be decided by the specific facts of your case.

If you are an independent contractor in every sense of the word (see the example above) you should purchase your own workers’ compensation insurance. This will provide coverage in case a work injury occurs. However, if you were injured at work and you believe you are an employee but the entity or person that pays you, or the work comp insurer, alleges you are an independent contractor you should seek the advice of an experienced workers compensation attorney as you may be entitled to work comp benefits.


Michael established The Sawaya Law Firm in 1977 and built it into one of the largest personal injury law firms in Colorado, with more than 20 lawyers and 80 staff members serving clients from five offices located in Denver, Greeley and Colorado Springs. Throughout its history, the firm has stayed true to its 12 Core Values, which emphasize excellence in advocacy and a commitment to providing outstanding client service. Michael studied sociology and economics as an undergraduate student at The Colorado College, and he earned his law degree from the Texas Tech University School of Law. In addition to being involved in several legal and community organizations, Michael enjoys playing music and cooking, and he has written a book on spiritual matters.