Utah General Contractors - Business and Law Practice Exam

Are owners of a sole proprietorship required to purchase workers' compensation insurance to cover themselves?

1. Yes

2. No

3. Only under certain conditions

4. Yes, if they have employees

The correct answer is: No

In Utah, owners of a sole proprietorship are not required to purchase workers' compensation insurance to cover themselves unless they have employees. This means that a sole proprietor can choose to forego this insurance for themselves since they are the only worker in their business. The primary purpose of workers' compensation insurance is to provide coverage for employees in the event of job-related injuries or illnesses. Since sole proprietors are not classified as employees of their business, they do not fall under the same requirements for coverage. Other options suggest varying conditions for insurance tasks. Some might imply an obligation to obtain coverage for self-protection or under specific circumstances. However, the law clearly specifies that it is only mandatory when there are employees involved, reinforcing that sole proprietors are not inherently required to insure themselves without the presence of employment relationships that necessitate such coverage.