What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Pennsylvania

Before hiring employees in Pennsylvania, businesses must secure specific types of insurance to comply with state regulations and protect their operations.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Pennsylvania employers with one or more employees. This insurance covers medical expenses and lost wages for employees injured or ill due to work-related activities. Ensure you obtain a policy before your first employee starts working.

Unemployment Compensation Insurance

Employers in Pennsylvania must register with the Pennsylvania Department of Labor & Industry to provide unemployment compensation insurance. This insurance funds unemployment benefits for eligible former employees. Registration typically occurs after hiring your first employee and requires regular reporting and tax payments.

Other Relevant Insurance Considerations

• Disability Insurance: While not mandatory, some employers opt for short-term disability insurance to support employees unable to work due to non-work-related injuries or illnesses.
• General Liability Insurance: Although not legally required, it is recommended to protect your business from third-party claims related to bodily injury or property damage.

Operational Tips

• Work with a licensed insurance provider familiar with Pennsylvania requirements to set up your policies.
• Maintain accurate recordkeeping of insurance certificates and employee information to support compliance audits.
• Integrate insurance premium payments and reporting into your payroll and bookkeeping systems to streamline operations.

As of 2026, verify current insurance thresholds and registration procedures with the Pennsylvania Department of Labor & Industry to ensure ongoing compliance.