Does Workers' Compensation Cover Contractors?
Written by
Principal Lawyer and Director · Last updated 21 August 2026
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Key Takeaway: Some independent contractors are covered by workers compensation as “deemed workers” under the Workplace Injury Management and Workers Compensation Act 1998 (NSW). Others, such as contractors who employ staff or run their own business, must take out their own insurance to be protected if injured at work.
Contractors and Workers Compensation: Quick Answers
Workers’ Compensation for Contractors , Are You Covered?
As work arrangements continue to evolve, understanding workers’ compensation for contractors is essential. Whether you are a contractor, sub-contractor, sole trader, or freelancer, knowing your WorkCover entitlements can protect you in the event of a workplace injury. Don’t wait until it’s too late to ask: “Does workers’ compensation cover contractors?”.
A common mistake many independent workers make is assuming they are covered by an employer’s workers’ compensation insurance, only to find out they are not eligible for a claim. In some cases, contractors may need to take out their own workers’ compensation insurance to ensure coverage.
Not being insured can leave you without financial protection if you suffer an injury while working. That’s why it’s crucial to understand your workers’ compensation rights as a contractor before an accident occurs. Similar coverage questions arise for workers comp for casual employees, who may also face gaps in coverage depending on how their employment is classified.
Workers are defined by the NSW legislation as a person who works under a contract of service or a training contract with an employer. This area of law is difficult and specific to individuals circumstances. In some cases what you may think is a subcontractor could be considered an employee and vice versa. When faced with a work-related injury, deemed workers are entitled to claim compensation for their losses.
Definition
In the workers insurance scheme of New South Wales (NSW), the definition of the word “worker” can be expanded to include independent contractors. However, types of contracted employment is differentiated under the Workplace Injury Management and Workers Compensation Act 1998 (NSW) and contractors without “deemed workers” status are not necessarily granted workers insurance.
- be engaged to carry out a particular task using their own skill and judgement
- employ others, delegate and sub-let work to another
- be paid on the basis of a quotation for the job
- supply their own tools and materials
- carry on an independent business in their own name or under a business or firm name.
A worker, on the other hand, is more likely to
- be directed by the employer regarding work to be performed and the time and manner in which it is performed
- be required to actually carry out work
- be paid on a time basis
- wear company uniform
- have tools and materials supplied by the employer
- work exclusively for a single employer
- be affected by PAYG tax arrangements.
It is important from the outset of your employment to understand and for it to be clearly documented whether you are an employee or not. It is important to ensure that you are covered in the unfortunate event that you are injured in the course of work but are not covered because you thought you were an employee covered by your employer however you are in fact not an employee and did not take out your own workers compensation insurance.
State Insurance Regulatory Authority (SIRA) also has an online tool to help determine a person’s worker status for workers insurance purposes, which can be accessed via this link.
If you are still unsure about your status regarding workers insurance, our workers compensation lawyers can offer guidance on your situation and help you claim your rights and entitlements. Our workers compensation lawyers are approved by the Workers Compensation Independent Review Office (WIRO) which means you do not pay for our costs and disbursements. For further information you can call us on 1800 952 898. To understand potential entitlements, see our workers compensation payout guide.
Workers Compensation for Contractors FAQ
Can independent contractors get workers compensation in NSW?
What is a deemed worker under NSW workers compensation law?
Which contractors are not covered by an employer’s workers compensation?
How does iCare distinguish a contractor from a worker?
Do I need my own workers compensation insurance as a contractor?
How can I find out if I am a deemed worker?
What if I thought I was covered but I was not an employee?
Do I have to pay for a workers compensation lawyer as a contractor?
About the author
Issa Rabaya · Principal Lawyer and Director
✓ Admitted to the Supreme Court of NSW and High Court of Australia ✓ LLB ✓ IRO-approved ✓ Law Society of NSW
Acts for injured people in CTP, workers compensation, TPD and public liability claims.
Why Choose Withstand Lawyers for Your Workers Compensation Claim?
Working out whether a contractor is covered by workers compensation is genuinely difficult, and getting it wrong can leave you without support after a serious injury. Withstand Lawyers has decades of combined experience helping injured workers and contractors across NSW understand their status and claim what they are owed. Our workers compensation lawyers at Withstand Lawyers are approved by the Workers Compensation Independent Review Office, so you do not pay for our costs and disbursements. We know how the deemed worker rules apply in real situations and how to build the evidence your claim needs. With Withstand Lawyers on your side, you never have to face an insurer alone. Over $47 million recovered, 99% success rate, no win, no fee.
Call Withstand Lawyers on 1800 952 898 for your free claim check today.
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