Pennsylvania Governor Tom Corbett recently signed into law House Bill 440, making workers’ compensation insurance available to sole proprietors, partners in partnerships, and members of limited liability companies (LLCs). The law permits insurers, including the State Workers’ Insurance Fund (SWIF), to offer the coverage.

Under prior law, sole proprietors, business partners and members of LLCs, while required to insure their employees against injuries, were unable to obtain the same protection for themselves, with an exception only for firms engaged in logging. The new law ensures that workers’ compensation is available to all without mandating coverage or imposing any other new requirements on insurers or small businesses.

“Sole proprietors and other small businesses need access to the peace of mind afforded by workers’ compensation coverage,” said Department of Labor & Industry Secretary Julia Hearthway. “This legislation makes that protection possible, ensuring that more Pennsylvanians injured on the job can make ends meet while they recover.”

In addition, the law will benefit businesses that hire independent contractors by creating a clear path for workers’ compensation coverage. In the past, businesses that hired contractors were sometimes subjected to claims when injuries occurred because the contractors had no other avenue for workers’ compensation coverage. Representative Mark Mustio, who sponsored the legislation, noted that “the recurring problem of being unable to accurately define what constitutes an independent contractor and their relationship to workers’ compensation coverage has taken millions of dollars out of our economy in the form of decreased productivity, expensive and time-consuming litigation and higher insurance premiums.”

“The small-business community has waited too long for this reform,” Governor Corbett said. “I am pleased that we are finally able to provide a crucial segment of our economy with this deserved protection.”

The law takes effect August 29.