Guide
If you run a one-person trade business, the honest answer is "it depends on your state and your trade license" — and getting it wrong can cost you a job, a license renewal, or a lot more than the premium.
General liability gets talked about constantly in trade Facebook groups. Workers' comp gets ignored right up until a GC's insurance coordinator emails you a certificate-of-insurance request the week before a job starts, or your license renewal form has a workers' comp box you don't know how to check. Fall is renewal season for a lot of licenses and policies, so this is a good month to actually settle it instead of guessing.
In most states, a true sole proprietor with zero employees is not legally required to carry workers' comp. That's the rule people repeat. It's also incomplete for anyone in construction or the skilled trades, because a second layer of rules sits on top of the general one:
Rule of thumb: if you're a licensed trade (roofing, electrical, HVAC, plumbing) working under contracts with GCs or property managers, assume you'll need to prove workers' comp status one way or another — either a policy or a formal exemption filing — even solo.
Being legally exempt and being able to prove it are two different things. Most states let an owner-only business file a formal exemption or waiver with the state workers' comp office, sometimes for a small fee. Once approved, you get a certificate number you can hand to a GC when they ask for proof of coverage — without one, you're stuck explaining an exemption verbally every time, which slows down getting on bigger jobs. If you work across state lines, know that an exemption in one state does not carry over to another; each state you actually perform work in needs its own check.
For context, small businesses overall pay an average of roughly $50-$65 a month for a workers' comp policy, but trade work sits well above that average because rates are priced per $100 of payroll and scale with injury risk in your trade class. Typically:
These are typical ranges, not quotes — get two or three actual quotes before you decide, since state and carrier differences are large. Whatever the number ends up being, treat it as a real line-item cost of doing business, not overhead you absorb quietly. Run it through your hourly rate calculator alongside your other fixed costs so the premium is actually baked into what you charge, and check the effect on a typical job in the job profitability calculator before you assume a policy will eat your margin — for most solo operators it's a smaller hit per job than people expect once it's spread across a full year of billable hours.
The practical failure mode isn't getting fined — it's losing bigger jobs. Property management companies and GCs increasingly build workers' comp into their standard subcontractor packet regardless of your state's legal minimum, because their own insurer requires it of anyone working on-site. If you can't produce a certificate or an exemption number on request, you get quietly dropped from the bid list before you even know why. If growing your commercial and GC-referral pipeline is part of your plan, treat having clean, current paperwork — license, liability, and workers' comp status — as part of your sales kit, not just compliance. Some contractors keep this bundled with their standard forms and renewal calendar so nothing lapses mid-season; the Operations Kit is one low-cost way to keep that kind of paperwork organized if you don't already have a system.
Don't guess based on what another contractor in a different state or trade told you. Pull your actual state's trade-specific rule, check your license renewal language, and read your current contracts for a COI clause. If you're genuinely exempt, file for the certificate so you can prove it fast. If you're not, price the premium into your rate now rather than discovering it mid-quote on a job you already priced without it. This isn't legal advice — confirm specifics with your state workers' comp board or your insurance agent, since requirements and thresholds change and vary by state.
In most states, a sole proprietor with zero employees is not legally required to carry workers' comp. But construction and trade licenses are the big exception: several states require certain trade licenses to carry workers' comp regardless of employee count, and general contractors increasingly require it in subcontractor agreements even when the state doesn't.
Requirements vary by state and by trade classification, and they change, so don't rely on last year's answer. States like Florida, and several others, specifically call out roofing and certain construction trades as needing coverage even with no employees. Check your state's labor or workers' comp board site, or your license renewal paperwork, for your specific trade code.
Typically $16 to $150+ per $100 of payroll per month depending on trade risk class and state, or roughly $50 to $160 a month for an owner-only or small crew policy in lower-risk trades, more for roofing and high-fall-risk work. Get an actual quote from two or three carriers since rates vary a lot by state and claims history.
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