What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Utah

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

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Utah 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 a private insurer or the Utah Workers' Compensation Fund.
• Ensure timely reporting and recordkeeping of workplace injuries as required by state regulations.

Unemployment Insurance

Utah employers must register with the Utah Department of Workforce Services to pay unemployment insurance taxes. This insurance provides temporary financial assistance to employees who lose their jobs through no fault of their own.

• Register online before hiring your first employee.
• Maintain accurate payroll records to calculate and report unemployment tax contributions.

Additional Insurance Considerations

While not legally required, consider the following insurance types to enhance operational security:

• General liability insurance to protect against third-party claims.
• Employment Practices Liability Insurance (EPLI) to cover claims related to workplace discrimination or wrongful termination.
• Health insurance offerings, especially if you have 50 or more full-time employees, to comply with federal Affordable Care Act requirements.

Summary

As of 2026, Utah businesses must secure workers' compensation insurance and register for unemployment insurance before hiring employees. Proper insurance setup supports compliance, risk management, and smooth payroll and reporting operations.