Business insurance by state.
Workers’ comp thresholds, regulatory notes, and the providers that serve each US state. Pick your state to see local rules and recommended coverage for small businesses and trades.
PHOTO · ANDRE BENZ / UNSPLASHWorkers’-comp rules by state
State guideCalifornia
Workers' compensation is mandatory for virtually all employers from the first employee under California Labor Code Section 3700. Certain contractor classifications also require coverage even with no employees (e.g., roofing contractors). Many contractor classifications require a CSLB license and a contractor license bond. Business insurance products are regulated by the California Department of Insurance.
WC thresholdOpen state guide →Required for all employers with one or more employees
State guideTexas
Texas is the only state where private employers may opt out of workers' compensation (non-subscriber status), though doing so removes key liability protections. Governmental entities and private employers contracting with government must provide coverage. Many contractor and trade licenses are issued at the state or municipal level. Regulated by the Texas Department of Insurance.
WC thresholdOpen state guide →Workers' comp is generally optional for private employers (Texas is the only state where private-sector employers may opt out)
State guideFlorida
Florida applies a stricter workers' comp threshold to the construction industry (one or more employees, including business owners who are corporate officers or LLC members) than to non-construction businesses (four or more employees). Many construction trades require state licensure and bonding. Regulated by the Florida Division of Workers' Compensation (Dept. of Financial Services).
WC thresholdOpen state guide →Construction: required at 1+ employees; non-construction: required at 4+ employees
State guideNew York
Workers' compensation is broadly mandatory for employers under New York Workers' Compensation Law. New York City and other municipalities add local licensing for many trades. Employers must also provide separate disability benefits (DBL) coverage. Regulated by the New York Workers' Compensation Board.
WC thresholdOpen state guide →Required for virtually all employers with one or more employees (WCL §2 and §3)
State guidePennsylvania
Workers' compensation is required for nearly all employers from the first employee under the Pennsylvania Workers' Compensation Act, with narrow exemptions. Home-improvement contractors must register with the Pennsylvania Attorney General. Regulated by the Pennsylvania Department of Labor & Industry.
WC thresholdOpen state guide →Required for all employers with one or more employees (full-time or part-time, including family members)
State guideIllinois
Workers' compensation is mandatory for essentially all employers from the first employee under the Illinois Workers' Compensation Act. Sole proprietors, partners, corporate officers, and LLC members may elect to exempt themselves but must still cover their employees. Roofing contractors require a state license. Regulated by the Illinois Workers' Compensation Commission.
WC thresholdOpen state guide →Required for all employers with one or more employees (including part-time workers), from the first day of hire
Ohio
Ohio is a monopolistic workers' comp state — coverage is purchased through the Ohio Bureau of Workers' Compensation (state fund), not private carriers. All employers with one or more employees must register with BWC and pay premiums. Private policies handle other lines. Stop-gap endorsements available for employer's liability. Regulated by the Ohio Bureau of Workers' Compensation.
WC thresholdOpen state guide →Required for all employers with one or more employees (monopolistic state fund — must purchase from Ohio BWC, not private carriers)
Georgia
Workers' compensation is generally required once an employer regularly has three or more employees. Corporate officers and LLC members count toward the employee total, even if they waive their own coverage via Form WC-10. Several construction trades require state licensure. Regulated by the Georgia State Board of Workers' Compensation.
WC thresholdOpen state guide →Required for employers with three or more employees (including regular part-time workers and corporate officers/LLC members)
North Carolina
Workers' compensation is required for all businesses with three or more employees under the North Carolina Workers' Compensation Act. Applies to corporations, sole proprietorships, LLCs, and partnerships. Corporate officers can elect exclusion but still count toward the threshold. General contractors above a project-cost threshold require a state license. Regulated by the North Carolina Industrial Commission.
WC thresholdOpen state guide →Required for employers with three or more employees
Michigan
Michigan's Workers' Disability Compensation Act sets dual triggers: employers must carry coverage if they have 3 or more employees at one time (any schedule), or if they regularly employ one or more employees 35+ hours per week for 13+ consecutive weeks. Many residential builders and trades require state licensure. Regulated by the Michigan Department of Labor and Economic Opportunity (WDCA).
WC thresholdOpen state guide →Required if employer has 3+ employees at any time (including part-time), OR has 1+ employee working 35+ hours/week for 13+ weeks in the preceding 52 weeks
New Jersey
Workers' compensation is broadly mandatory for all NJ employers under the New Jersey Workers' Compensation Act, including corporations with any employee (including corporate officers), partnerships and LLCs with non-partner/non-member employees, and sole proprietorships with any employees. Home-improvement contractors must register with the Division of Consumer Affairs. Regulated by the New Jersey Department of Labor and Workforce Development.
WC thresholdOpen state guide →Required for all employers with one or more employees (all New Jersey employers not covered by federal programs)
Virginia
Workers' compensation is required once an employer regularly has more than two part-time or full-time employees. Subcontractor employees count toward the employer's total. Contractors are licensed in classes (A/B/C) by project size. Regulated by the Virginia Workers' Compensation Commission (under the Virginia State Corporation Commission).
WC thresholdOpen state guide →Required for employers who regularly employ more than two employees (3 or more employees)
Washington
Washington is a monopolistic workers' comp state — coverage is obtained exclusively through the Department of Labor & Industries (L&I), not private carriers. All employers with workers must register and pay premiums to L&I. Contractors must register and bond with L&I. Other commercial lines regulated by the Washington Office of the Insurance Commissioner.
WC thresholdOpen state guide →Required for all employers with employees (monopolistic state fund — must purchase from WA L&I, not private carriers)
Arizona
Arizona law requires workers' compensation coverage for all public and private employers with one or more employees. Most construction trades require an Arizona Registrar of Contractors (ROC) license and a license bond. Regulated by the Industrial Commission of Arizona and the Arizona Department of Insurance and Financial Institutions.
WC thresholdOpen state guide →Required for all employers with one or more employees (full-time or part-time)
Tennessee
Tennessee generally requires workers' comp at five or more employees for non-construction employers. All construction service providers (CSPs) must carry coverage from the first employee, regardless of business size. Contractors above a monetary threshold require a state license. Regulated by the Tennessee Department of Labor & Workforce Development Bureau of Workers' Compensation.
WC thresholdOpen state guide →Non-construction: 5+ employees; construction (CSPs): required for all employers with 1+ employee
Massachusetts
Workers' compensation is mandatory for virtually all Massachusetts employers from the first employee under M.G.L. Chapter 152. LLCs and LLPs without employees other than members/partners are exempt, but coverage is required as soon as any employee is added. Construction supervisor and home-improvement contractor registrations apply. Regulated by the Massachusetts Department of Industrial Accidents.
WC thresholdOpen state guide →Required for all employers with one or more employees (including part-time and family members; domestic workers must work 16+ hrs/week)
Indiana
Under Indiana Code 22-3-2-2, every employer and employee must comply with workers' compensation provisions. Coverage applies from the first day of hire. Sole proprietors, partners, and LLC members may exempt themselves but must cover their employees. Trade licensing is largely handled at the municipal level. Regulated by the Indiana Workers' Compensation Board.
WC thresholdOpen state guide →Required for all employers with one or more employees (coverage begins from first day of hire, per IC 22-3-2-2)
Missouri
Missouri generally requires workers' comp at five or more employees for non-construction employers, but all construction-industry employers must cover from the first employee. Trade licensing is largely municipal. Regulated by the Missouri Department of Labor and Industrial Relations, Division of Workers' Compensation.
WC thresholdOpen state guide →Non-construction: 5+ employees; construction: required at 1+ employee
Maryland
Workers' compensation is required for virtually all Maryland employers from the first employee under the Maryland Workers' Compensation Act. Employers and employees cannot waive coverage provisions. Home-improvement contractors must be licensed by the Maryland Home Improvement Commission. Regulated by the Maryland Workers' Compensation Commission.
WC thresholdOpen state guide →Required for all employers with one or more employees (full-time or part-time)
Wisconsin
Wisconsin's Worker's Compensation Act has dual triggers: employers with 3 or more full-time or part-time employees must carry coverage immediately; employers with fewer than 3 employees must obtain coverage by the 10th day of the month following any calendar quarter in which they paid $500+ in combined gross wages. Dwelling contractors require state certification. Regulated by the Wisconsin Department of Workforce Development.
WC thresholdOpen state guide →Required at 3+ employees (any schedule), OR for employers with 1+ employee who has paid $500+ in gross wages in any calendar quarter
Colorado
Colorado requires workers' compensation coverage for all employers with one or more employees, with narrow exemptions for certain independent contractors and sole proprietors with no employees. Electrical and plumbing trades require state licensure; general contracting is licensed locally. Regulated by the Colorado Division of Workers' Compensation (Dept. of Labor & Employment).
WC thresholdOpen state guide →Required for all employers with one or more employees
Minnesota
Minnesota Workers' Compensation Law (Minn. Stat. §176.181) mandates coverage with no minimum employee threshold. Even a single part-time employee triggers the coverage requirement. Residential building contractors require state licensure. Regulated by the Minnesota Department of Labor and Industry.
WC thresholdOpen state guide →Required for all employers with one or more employees (no minimum employee count threshold under Minn. Stat. §176.181)
South Carolina
Workers' compensation is required for South Carolina employers with four or more employees (including part-time workers and family members). Employers with an annual payroll of less than $3,000 are exempt regardless of employee count. Contractors above a monetary tier require state licensure and bonding. Regulated by the South Carolina Workers' Compensation Commission.
WC thresholdOpen state guide →Required for employers with 4 or more employees (part-time workers and family members count; employers with annual payroll under $3,000 are exempt)
Alabama
Workers' compensation is generally required once an employer regularly has five or more employees (full-time or part-time). However, employers in the business of constructing or assisting on-site with new single-family detached residential dwellings must carry coverage regardless of employee count. General contractors above a monetary threshold require a state license. Regulated by the Alabama Department of Labor.
WC thresholdOpen state guide →Required for employers with five or more employees (exception: residential construction employers require coverage regardless of employee count)
Louisiana
Workers' compensation is required from the first employee under Louisiana law, including part-time, temporary, and seasonal workers. Commercial and residential contractors above monetary thresholds require state licensure. Regulated by the Louisiana Workforce Commission, Office of Workers' Compensation.
WC thresholdOpen state guide →Required for all employers with one or more employees (part-time, full-time, temporary, or seasonal)