Do businesses need workers compensation insurance before hiring?

Workers' Compensation Insurance Requirements in Maryland Before Hiring

In Maryland, businesses must secure workers' compensation insurance before hiring employees. This insurance protects both the employer and employees by covering medical expenses and lost wages if a work-related injury or illness occurs.

Key Operational Steps for Compliance

• Obtain Workers' Compensation Insurance: As of 2026, Maryland law requires most employers with one or more employees to have workers' compensation coverage prior to hiring.
• Register with the Maryland Workers' Compensation Commission: Employers must file necessary forms and maintain proof of insurance or self-insurance authorization.
• Classify Employees Correctly: Proper employee classification affects insurance premiums and compliance. Misclassification can lead to penalties and increased costs.
• Maintain Accurate Records: Keep detailed payroll and injury reports to support claims and audits.
• Integrate with Payroll Systems: Automate premium calculations and reporting to ensure timely payments and compliance.

Additional Operational Considerations

Beyond insurance, businesses should consider related compliance areas such as employee onboarding, safety training, and regular review of insurance policies to adjust coverage as the workforce changes. Proper bookkeeping and recordkeeping support smooth claims processing and regulatory reporting.