What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Ohio

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

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Ohio employers with one or more employees. This insurance covers medical expenses and lost wages if an employee is injured or becomes ill due to work-related activities.

• Obtain coverage through the Ohio Bureau of Workers' Compensation (BWC) or an approved private carrier.
• Maintain accurate payroll and employee classification records to ensure correct premium calculations.
• Report new hires promptly to stay compliant with state reporting requirements.

Unemployment Insurance

Ohio requires employers to pay into the unemployment insurance system, which provides temporary benefits to eligible workers who lose their jobs through no fault of their own.

• Register with the Ohio Department of Job and Family Services (ODJFS) to set up unemployment tax accounts.
• Keep detailed payroll records for accurate tax reporting and compliance.

Additional Insurance Considerations

While not legally required, consider the following insurance types to manage operational risks effectively:

• General liability insurance to protect against third-party claims.
• Employment practices liability insurance (EPLI) to cover claims related to workplace discrimination or wrongful termination.
• Commercial auto insurance if employees use vehicles for business purposes.

Operational Tips

• Verify insurance coverage before the first day of employment to avoid penalties.
• Automate payroll and insurance premium payments to streamline compliance.
• Maintain detailed employee records to support insurance claims and audits.
• Review insurance policies annually to adjust coverage based on workforce changes.