Do I need workers compensation insurance?

Workers' Compensation Insurance Requirements in Vermont

In Vermont, most businesses with employees are required to carry workers' compensation insurance. This insurance provides coverage for medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities.

When Is Workers' Compensation Insurance Required?

• Employers with one or more employees: If you have at least one employee working for your business, you generally must obtain workers' compensation insurance.
• Types of employees covered: Both full-time and part-time employees typically count toward this requirement.
• Exemptions: Certain types of workers, such as sole proprietors without employees or independent contractors, may not require coverage, but proper classification is essential.

Operational Considerations

• Insurance providers: You can purchase workers' compensation insurance through private insurers or the Vermont Workers' Compensation Insurance Plan if you cannot obtain coverage elsewhere.
• Compliance and penalties: Maintaining coverage helps avoid fines, penalties, and potential business interruptions.
• Recordkeeping: Keep detailed records of all employees and coverage documentation to ensure compliance during audits or inspections.
• Payroll impact: Workers' compensation premiums are often calculated based on payroll and job classifications, so accurate payroll records are critical.

As of 2026

Requirements may be updated, so regularly check with the Vermont Department of Labor or a local insurance broker to ensure your business remains compliant with current workers' compensation insurance regulations.