Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Kentucky

As of 2026, Kentucky requires most employers to carry workers compensation insurance to cover medical expenses and lost wages for employees injured on the job.

When Workers Compensation Insurance Is Required

• Employers with one or more employees: If you have at least one employee, you generally must provide workers compensation insurance.
• Construction and manufacturing businesses: These industries have strict enforcement and must maintain coverage regardless of employee count.
• Exceptions: Sole proprietors, partners, and certain family members may be exempt if they have no employees.

Operational Steps to Comply

• Obtain coverage: Purchase workers compensation insurance through a private insurer or the Kentucky Workers' Compensation Insurance Plan if you cannot find coverage in the market.
• Maintain records: Keep detailed records of employee payroll and injury reports to support claims and reporting requirements.
• Post notices: Display the Kentucky Workers' Compensation Notice in a visible area at your workplace to inform employees of their rights.
• Renew coverage annually: Ensure your insurance policy remains active to avoid penalties and maintain compliance.

Related Operational Considerations

• Employee classification: Properly classify workers as employees or independent contractors to determine insurance obligations.
• Payroll integration: Automate payroll systems to track wages accurately, which affects insurance premiums.
• Compliance monitoring: Regularly review state updates and maintain communication with your insurer to stay compliant with Kentucky laws.