What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in South Carolina

Before hiring employees in South Carolina, businesses must secure specific insurance coverage to comply with state regulations and protect their operations.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most South Carolina employers with four or more employees. This insurance covers medical expenses and lost wages if an employee is injured on the job. It is essential to verify your business size and industry to determine if you meet the threshold.

Unemployment Insurance

Employers must register for unemployment insurance with the South Carolina Department of Employment and Workforce. This insurance provides temporary income to employees who lose their jobs through no fault of their own. Setting up payroll systems to handle unemployment tax reporting is critical for compliance.

Additional Considerations

• General liability insurance is not required by law but is highly recommended to protect your business against third-party claims.
• Ensure proper employee classification to avoid misclassification issues that can affect insurance requirements and premiums.
• Maintain accurate recordkeeping for all insurance policies and employee-related documentation to support compliance and audits.
• Consider payroll automation tools to streamline tax payments and insurance reporting obligations.

As of 2026, always verify current insurance requirements with the South Carolina Department of Insurance and the Department of Employment and Workforce to accommodate any regulatory changes.