What insurance is required before hiring employees?

Mandatory Business Insurance Before Hiring Employees in Massachusetts

Before hiring employees in Massachusetts, businesses must secure specific insurance coverage to comply with state regulations and protect both the business and its workforce.

Required Insurance Types

• Workers’ Compensation Insurance: This is mandatory for most employers with one or more employees. It covers medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities. Ensure your policy meets Massachusetts state standards.
• Unemployment Insurance: Employers must register with the Massachusetts Department of Unemployment Assistance and pay unemployment insurance taxes. This insurance provides temporary benefits to employees who lose their jobs through no fault of their own.
• Employer Liability Insurance: Often included with workers’ compensation policies, this insurance protects the business against lawsuits related to workplace injuries or illnesses.

Additional Considerations

• Health Insurance Requirements: Under the Affordable Care Act and Massachusetts state law, certain employers may need to offer health insurance to full-time employees. Review your obligations based on business size and employee count.
• Disability Insurance: Massachusetts requires employers to provide short-term disability insurance for employees, which covers non-work-related illness or injury.
• Recordkeeping and Reporting: Maintain accurate insurance records and report employee information as required by state agencies to stay compliant.

Operational Tips

• Consult with an insurance broker familiar with Massachusetts requirements to select appropriate coverage before onboarding employees.
• Automate payroll and tax reporting to ensure timely payment of unemployment insurance taxes and compliance with reporting deadlines.
• Review and update insurance policies annually or when hiring additional employees to maintain compliance and adequate coverage.

As of 2026, these insurance requirements are essential operational steps for Massachusetts businesses preparing to hire employees.