Growing your Pillar To Post franchise is a big achievement, but with it comes new challenges. As employees are hired, new locations of operation open or business categories change, it’s important to ensure your business stays compliant and manages the new risks, especially regarding workers’ compensation coverage. It can be difficult to manage this coverage as you are expanding your business, so we have compiled some helpful tips:

Expanding Your Franchise from Sole Proprietorship to Hiring Employees

If your Pillar To Post franchise is a sole proprietorship or partnership with no employees, you’re in good company. According to recent Census data, 76.2 percent of U.S. businesses have no paid employees. That said, eventually your businesses may need to hire some employees.

Here’s what to know about workers’ compensation for home inspectors when you hire your first employees:

  • Workers’ compensation coverage is required by law in almost every state for non-owner or non-partner employees.
  • Employees must be covered by workers’ compensation whether they are salaried or hourly, exempt or non-exempt, or part-time or full-time workers.
  • Commission-only workers are required to be covered under some state laws.
  • Contractors and subcontractors and their employees may need coverage in some states.
  • Family members who are paid by a business count as employees and need to have coverage.
  • Owners and partners are not required to have workers’ compensation coverage for themselves, but still have the option to cover themselves, if desired.

Expanding Your Franchise Across State Lines

According to Census data, more than one in 10 businesses has business operations in multiple locations. It’s not uncommon for businesses to expand to new cities, counties and states. That said, workers’ compensation requirements take on a new level of complexity when you expand across state lines.

Workers’ compensation programs are managed at the state level, meaning each state has its own requirements for benefits, coverage areas, coverage type and more. You’ll be required to have adequate insurance for all employees wherever you operate, to the extent each state’s guidelines require.

Different state systems exist for coverage, including:

  • Monopolistic state fund—Businesses must obtain workers’ compensation coverage from the state fund.
  • Hybrid competitive state-run fund—Required coverage is available from the state or from a private insurer.
  • Private insurance—Businesses must obtain workers’ compensation coverage from a private insurer.
  • Self-insure states—Businesses that meet certain qualifications may self-insure.
  • Opt-in coverage—Workers’ compensation coverage is not required but businesses are allowed to opt in for coverage (currently only applicable in Texas).

State requirements undergo yearly review by state legislatures and requirements change often. The changes can be dramatic. Only a few years ago, New Jersey was also an opt-in coverage state and there were five states, not four, with a monopolistic state fund program.

Expanding Your Franchise from One Business Category to Another

As an owner of an expanding franchise, it’s also important to know that a neighboring state may have different business category definitions than your home state. It’s a factor that can affect how much insurance coverage is needed to be compliant for that jurisdiction. Some of the key differences can include industry, number of employees and business structure.

The Importance of Proper Workers’ Compensation for Home Inspectors

While workers’ compensation for home inspectors can be confusing, it’s important to be properly insured. Coverage programs protect both workers and their employers, ensuring employees and their families have a remedy for workplace injuries and that employers are not burdened with costly litigation in the event of an accident. Proper coverage also protects business owners from the fines and criminal penalties that may result from noncompliance in some cases.

Taking the next step with your Pillar To Post franchise is something to celebrate. But before you hire a new employee or expand across state lines, take a moment to review your workers’ compensation coverage obligations. It will help minimize your risk and make sure you’re prepared for your business’s next big step.


With a Workers’ Compensation policy from Lockton Affinity, you can get the coverage you need to meet your state and Pillar To Post franchisor requirements and minimize the risks you face as a home inspector.