In New York State it is mandatory that you carry both Workers Compensation and Disability if you have any employees on payroll. If you have employees and do not carry one or both of these policies then you will get charged a financial penalty by the State.
If you don’t have employees then there is no reason to have a Disability policy, but there is still a reason to carry Workers Compensation. If you do not have employees on payroll then you can purchase an “If Any” Workers Compensation policy.
An “If Any” Workers Comp. policy will help protect you in the event that there are any contractors or subcontractors hired and paid on 1099 that do not have workers comp insurance of their own or it is inadequate coverage. Ideally you will want to hire licensed and insured contractors and make sure that they list the appropriate parties as additional insureds on their policy but that doesn’t always happen so an “If Any” policy can help provide some protection.
A Disability policy premium is calculated based on the number of male and female employees while a Workers Compensation policy premium is rated based on the job description and payroll. A Workers Comp policy will get audited annually to ensure that the payroll for the year was accurate. If the payroll is higher than anticipated then you will owe more money in premium, but if the payroll is lower then you will receive a credit that normally gets applied to the next policy term.
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