Workers Comp for Sole Proprietors in South Carolina

Workers comp for sole proprietors in South Carolina is usually optional for the owner, but it can still matter fast. General contractors, property managers, and larger clients may ask for proof of coverage or proof of exemption before they let a self-employed contractor onto a job.

Updated October 28, 2026.

If you are self-employed and trying to decide whether to carry workers compensation insurance, start with the contract requirement, your injury risk, and whether your health coverage would actually help after a work-related injury.

If you are a self-employed contractor or subcontractor, also compare this with Morgano’s contractor insurance in Greenville SC page so the workers comp, general liability, and COI pieces line up.

Do Self-Employed Workers Need Workers Comp in South Carolina?

A sole proprietor generally is not automatically covered as an employee, but may be able to elect coverage. As a general rule, a South Carolina business that regularly employs four or more employees must carry workers compensation insurance. Part-time workers and family members count. State law also provides exemptions, including for a business whose total annual payroll in the previous calendar year was less than $3,000. Whether particular workers count and whether an exception applies depend on the facts. Check with the South Carolina Workers’ Compensation Commission or a qualified adviser. See our workers comp guide for SC small businesses for more information.

A sole proprietor working alone may be exempt from a state coverage requirement, but contractual obligations and the facts of the work still matter, including:

• Contract requirements from general contractors
• Client demands for a certificate of insurance
• The financial fallout of a serious on-the-job injury

For example, a spouse and two part-time helpers would be three workers. This alone does not meet the general four-employee threshold. Hiring additional workers can change the analysis; confirm worker status and applicable exemptions.

When a Sole Proprietor Should Carry Workers Comp Anyway

How to Opt Into Workers Comp Coverage in SC

South Carolina law permits a sole proprietor or partner actively engaged in a business whose employees are eligible for workers compensation benefits to elect inclusion in the business’s coverage by notifying the insurer. Ask the insurer or agent how to document the election and confirm when and whether the owner is covered. Rules for LLC members and individual arrangements should be confirmed for the particular business. The Commission says a previously exempt employer that voluntarily procures coverage remains subject to the Act until it files Form 38 withdrawing that election. Do not assume Form 38 alone removes an individual owner from a policy; ask the carrier and Commission about the correct process. See SC Code Section 42-1-130 and the Commission’s employer FAQs.

What Happens If You Get Injured Without Workers Comp

For a compensable injury, workers compensation may provide authorized medical treatment and temporary wage benefits, subject to the law and the facts of the claim. South Carolina generally does not allow wage compensation for the first seven calendar days of disability; if disability lasts more than 14 days, compensation is allowed from the start of disability. Medical benefits are treated separately. Without workers compensation, payment depends on any other applicable coverage and the circumstances; check the policy rather than assuming it pays or excludes a particular injury. See the Commission’s injured-worker FAQs.

General Contractors and the COI Requirement

A general contractor or client may require a certificate of insurance or other documentation before work begins. South Carolina’s statutory-employer rules can make an owner or contractor responsible for workers compensation for certain workers of subcontractors, depending on the relationship and circumstances. The Commission says whether a subcontractor with fewer than four employees must carry coverage is determined case by case. Ask the hiring party what its contract requires and consult the Commission or a qualified adviser about your situation. A contractual condition is separate from the statutory coverage requirement. See the Commission’s employer FAQs and our workers comp guide for contractors.

Alternatives to Workers Comp for Self-Employed in SC

Occupational accident, disability and health policies differ in terms and are not automatically substitutes for workers compensation. Ask the insurer and the contracting party what a policy covers and what documentation is accepted. General liability addresses different risks; review its terms. Learn more about what workers comp covers.

How Much Does Workers Comp Cost for Sole Proprietors in SC?

Cost depends on the work performed, applicable payroll or owner-rating rules, coverage choices and the insurer. Ask for a quote based on your business and confirm how the owner is treated. See our guide on workers comp costs in South Carolina.

The Independent Contractor vs. Employee Question

A 1099 or method of payment alone does not determine whether someone is an employee. Classification depends on the facts, including the right to control the work; consult the Commission or a qualified adviser. See the Commission’s employer FAQs. A business insurance review can help identify questions to ask.

How an Independent Insurance Agent Helps

An independent agent can discuss available options and obtain quotes where available.

Ask an agent about coverage and documentation questions, including:

• Do you need to opt in?
• Will your GC accept your current COI?
• Are your workers classified correctly?
• Should you bundle workers comp with general liability and HNOA coverage for SC businesses?

Frequently Asked Questions

The Morgano Agency Inc
206B Pine Knoll Dr, Greenville, SC 29609
Phone: (864) 609-5285 | Fax: (864) 609-5689
Email: vic@morganoagency.com
Monday – Friday, 9:00 AM – 5:00 PM