What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in North Carolina

Before hiring employees in North Carolina, businesses must secure specific insurance coverage to comply with state operational requirements and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most employers in North Carolina once they hire three or more employees. This insurance covers medical expenses and lost wages if an employee is injured on the job.

• It applies to full-time, part-time, and temporary employees.
• Businesses must obtain this coverage before employees begin work to avoid penalties.
• Ensure you work with a licensed insurance provider in North Carolina.

Unemployment Insurance

North Carolina requires employers to pay into the state unemployment insurance program. While this is not an insurance policy you purchase directly, you must register with the North Carolina Division of Employment Security (DES) and pay quarterly unemployment taxes.

• This funding supports employees who become unemployed through no fault of their own.
• Registering promptly after hiring your first employee is critical for compliance.

Additional Insurance Considerations

While not legally required, consider the following insurance types to support operational risk management:

• General liability insurance to protect against third-party claims.
• Commercial auto insurance if employees use vehicles for business.
• Health insurance if you meet federal Affordable Care Act requirements for employer size.

Operational Tips

• Keep detailed records of all insurance policies and payments for compliance and auditing.
• Review employee classification to ensure proper insurance coverage aligns with their status.
• Use payroll and compliance automation tools to track insurance-related deadlines and filings.

As of 2026, always verify insurance requirements with the North Carolina Industrial Commission and the Division of Employment Security to stay current with any changes in regulations.