Workers’ compensation has a lot of nuances and varies state by state, but here are some basics. This insurance covers employees on payroll who receive a W-2. It is not meant to cover volunteers or individuals getting paid as independent contractors. That said, if an independent contractor working for you is injured and does not have a workers’ compensation policy in place then your policy should extend to cover that individual.
It is very important that you ascertain whether your people are independent contractors or employees! Many people get fined by the Workers’ Compensation Board because their “independent contractors” were actually employees. According to the IRS:
"The general rule is that an individual is an independent contractor if you, the person for whom the services are performed, have the right to control or direct only the result of the work and not the means and methods of accomplishing the result."
For example, if you said, “Be ready to perform ‘The Nutcracker’ at 1:00 p.m. on Sunday, December 12,” but did not schedule any rehearsals (i.e., the performer was responsible for preparing on his or her own time), then that person is an independent contractor. However, if you scheduled rehearsals and required that the performer attend, then you are now in control of the “means and methods” of accomplishing the work.
If you are not sure, don’t risk it: consult a lawyer who specializes in employment issues. The safest choice is to pay people as employees and get workers’ compensation to cover them. Fines of $65,000 and up are not uncommon; in contrast, this policy can cost as little as $250.
I don’t just have people that I pay, I have lots of volunteers. Volunteer Accident
I know all of this and I have crazy amounts of coverage. In fact, the Department of Labor is my friend on Facebook! But I did just contract Marc Jacobs to design my costumes. Property Coverage