Yes, where your state allows it. Excluding yourself takes your own payroll off the bill, which saves that payroll times the rate for your work. The trade-off is real. If you exclude yourself and get hurt, workers comp pays nothing toward your medical bills or your lost wages, and some general contractors will not let you on site that way. Who this is for: owners who are on the payroll and wondering whether to take themselves off.
The short version
- Where allowed, excluding yourself saves your rated payroll times your rate. For an owner in the field that can be thousands a year.
- How your pay is counted depends on your business type: a flat state amount for sole proprietors and partners, actual pay within state limits for officers.
- An excluded owner has no coverage for their own injury. Some health plans exclude work injuries too.
- Many general contractor contracts require owners to be covered, or to sign a waiver form.
- Rules differ by state, and several states do not let construction owners opt out at all.
How much does excluding myself actually save?
In many states your own payroll is not counted at what you actually pay yourself. Sole proprietors, partners, and LLC members who choose to be covered are usually rated on a flat amount the state sets. Corporate officers are usually rated on their actual pay, but only between a state minimum and a state maximum. Your saving is that rated amount times the rate for your job category (the class code). There is also a floor. Every policy has a minimum premium, so on a small account taking yourself off saves less than the arithmetic suggests. The table uses an illustrative $60,000 of rated owner payroll.
| What the owner does | Illustrative rate per $100 | Saving from excluding yourself |
|---|---|---|
| Works on roofs | $25.00 | About $15,000 a year |
| Frames with the crew | $8.00 | About $4,800 a year |
| Works as an electrician | $5.00 | About $3,000 a year |
| Office work only, in a separate office | $0.40 | About $240 a year |
Notice the last row. If you only do office work, excluding yourself saves almost nothing and gives up real coverage.
What do I give up?
Everything workers comp would pay you. If you are hurt on the job as an excluded owner, there is no payment for your medical bills, no weekly check while you cannot work, and no death benefit for your family. Some health plans also exclude injuries that happen at work, so check yours. See the workers comp overview.
Will my customers accept an excluded owner?
Often not. Many general contractor subcontracts require every person on site, including owners, to be covered. If you are hurt on their project with no coverage, their insurer may charge them for your labor at their own year-end payroll check. Some states have a waiver form an owner can sign so the general contractor is not charged, and some contracts accept it. Read the insurance section of your contract before you file. See what insurance a subcontractor needs.
Am I allowed to exclude myself?
It depends on your state and on how your business is organized. Your state guide has the exact rule.
| Business type | Usual starting point | Can you change it? |
|---|---|---|
| Sole proprietor | Excluded by default in most states, but several states treat a sole proprietor doing construction work as an employee who cannot opt out | Usually yes, you can choose to be covered |
| Partner in a partnership | Excluded by default in most states, with the same construction exception | Usually yes, you can choose to be covered |
| Officer of a corporation | Included by default in most states | Usually yes, by filing a state form, sometimes only if you own a minimum share |
| Member of a limited liability company | Varies the most from state to state | Depends on the state and on how the company is taxed |
Construction is the common exception. In Florida a construction sole proprietor or partner cannot exempt out at all, and only officers or LLC members owning at least 10 percent can, three per company at most. State guides: sole proprietors in Florida, corporations in Massachusetts, and limited liability companies in California.
How do I exclude myself?
You sign your state's form, usually called an election or exclusion form, and give it to the insurer. Some states also file it with the state. In North Dakota, Ohio, Washington, and Wyoming you deal with the state fund instead, and owner coverage is something you buy rather than something you opt out of. In Texas, workers comp is optional for most private employers, so ask about the whole policy first. The exclusion starts from the date it is accepted, not before. At the year-end check, if the insurer has no form on file, your payroll is charged anyway.
When is excluding myself a bad idea?
- You work in the field, at height, or with power tools most days.
- Your family depends on your income and you have no disability insurance.
- Your general contractor requires owners to be covered.
- The saving is small because you mostly do office work.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A two-person painting company in Florida, set up as a corporation, where the owner is an officer and paints alongside one employee. In Florida a construction sole proprietor or partner cannot exempt out at all; only officers or members owning at least 10 percent can, three per company at most. For this illustration his rated officer pay is $55,000 and the painting rate is $7.00 per $100, so covering him costs about $3,850 a year.
What went wrong: He filed Florida's Certificate of Election to be Exempt with the state to save the $3,850. Six months later he fell from an extension ladder and broke his wrist. He could not paint for eight weeks.
What it cost: Illustrative math: his health plan paid the surgery after a $6,000 deductible, and he lost about $12,000 of income while the employee worked alone. Roughly $18,000 against a saving of $3,850 a year.
The fix: At renewal the owner chose to be covered again. The broker also found the employee's payroll had been rated at a higher category than the work required, which recovered most of the $3,850.
Frequently asked questions
Q: Can excluding myself as the owner make workers comp cheaper?
Yes, where your state allows it. You save the payroll amount your state counts for owners, times your rate. That is significant if you work in the field and tiny if you only do office work.
Q: How much will excluding myself save?
The payroll amount your state counts for owners, times your rate. Many states set that at a flat figure rather than your real pay. For an illustrative $60,000 at a $5.00 electrical rate, that is about $3,000 a year.
Q: What happens if I get hurt after excluding myself?
Workers comp pays nothing for you. No medical bills, no lost wages, no permanent injury payment. Your health plan and any disability insurance are all you have.
Q: Can a general contractor refuse to hire me if I am excluded?
Yes. Many subcontracts require every person on site to be covered, including owners. Some accept a state waiver form instead. Check the contract before you file.
Q: Can I exclude myself and still cover my employees?
Yes. The exclusion applies only to you. Your employees stay fully covered, and their payroll is still rated and charged as usual.
Q: Can I change my mind and include myself again mid-year?
Usually yes, by filing the election form with the insurer. Coverage starts when the form is accepted, not before.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Running the numbers on an owner exclusion, and checking the contracts it might conflict with, is a conversation we have with contractors every week.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.