Optional workers’ compensation coverage (sole proprietors and executives)

A buyer who becomes a sole proprietor, partner or executive officer of the business they buy meets this question after closing: the employees may be insured while the owner is not. It is separate from the seller-side check described in what a WSIB clearance certificate is.

Ontario (WSIB)

The WSIB’s operational policy says independent operators, sole proprietors, partners and executive officers are not automatically covered under the Workplace Safety and Insurance Act, 1997 unless they apply for optional insurance or are in the construction industry and compulsorily covered. An applicant must provide proof of earnings that the WSIB accepts.

British Columbia (WorkSafeBC)

WorkSafeBC says a sole proprietor or partner in a partnership may not be automatically covered by the Workers Compensation Act, and eligible owners can buy Personal Coverage, formerly called Personal Optional Protection. An owner or shareholder of an incorporated company who works for it is not eligible, because the company is the employer.

What to check

• Whether the buyer will run the business as a sole proprietor, in a partnership or through a corporation.
• Whether the industry is one where coverage for owners is compulsory.
• What proof of earnings the regulator needs.