Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Maryland

In Maryland, workers compensation insurance is a critical part of operating a business with employees. Understanding when and how to obtain this insurance helps maintain compliance and protect your business financially.

When Is Workers Compensation Insurance Required?

• Employers with Employees: If your business has one or more employees, you are generally required to carry workers compensation insurance.
• Domestic Employers: Businesses employing domestic workers such as housekeepers or caregivers must also provide coverage.
• Construction Industry: Special rules apply, but coverage is mandatory regardless of the number of employees.

Operational Considerations

• Employee Classification: Correctly classify workers as employees or independent contractors to determine insurance obligations.
• Insurance Providers: You can obtain coverage through private insurers or the Maryland Injured Workers Insurance Fund.
• Recordkeeping and Reporting: Maintain accurate payroll and injury records to comply with state reporting requirements.
• Payroll Integration: Automate payroll deductions and insurance premium payments to streamline compliance.

Additional Compliance Tips

• Registration: Register your business and obtain an Employer Identification Number (EIN) before hiring employees.
• Regular Review: As of 2026, review your coverage annually to adjust for changes in employee count or business operations.
• Penalties: Avoid penalties and fines by securing coverage before employees begin work.

Ensuring proper workers compensation insurance coverage in Maryland protects both your employees and your business operations. Incorporate this into your startup checklist for smooth and compliant business management.