Do businesses need workers compensation insurance before hiring?

Workers Compensation Insurance Requirements in Indiana Before Hiring

In Indiana, businesses must understand workers compensation insurance obligations before hiring employees to ensure compliance and protect their operations.

• Mandatory Coverage: As of 2026, most Indiana employers with one or more employees are required to carry workers compensation insurance. This applies regardless of whether employees are full-time, part-time, or seasonal.
• Business Registration: Before hiring, register your business with the Indiana Department of Workforce Development (DWD) to obtain a workers compensation policy or qualify for self-insurance if eligible.
• Employee Classification: Correctly classify workers as employees or independent contractors. Only employees require workers compensation coverage, which affects payroll and insurance premiums.
• Insurance Providers: You can obtain workers compensation insurance through private insurers or the Indiana Workers Compensation Insurance Plan if you have difficulty securing coverage.
• Compliance and Penalties: Operating without required workers compensation insurance before hiring can lead to fines, stop-work orders, and liability for employee injury claims.
• Recordkeeping and Reporting: Maintain accurate records of employee wages and coverage status. Report payroll and claims as required by Indiana DWD to remain compliant.

Ensuring workers compensation insurance is in place before hiring helps protect your business from financial risk and supports smooth payroll and compliance operations.