What insurance is required before hiring employees?

Required Business Insurance Before Hiring Employees in Wisconsin

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

Mandatory Insurance Types

• Workers' Compensation Insurance: Wisconsin law requires most employers with employees to carry workers' compensation insurance. This coverage provides benefits for employees who suffer work-related injuries or illnesses. It is essential to arrange this insurance before the first employee starts work.
• Unemployment Insurance: Employers must register with the Wisconsin Department of Workforce Development and pay unemployment insurance taxes. This insurance supports employees who lose their jobs through no fault of their own. Setting up the account and understanding reporting requirements is critical before hiring.
• Disability Benefits Insurance: While not mandatory for all employers, Wisconsin offers a voluntary disability benefits program that businesses can consider to provide income replacement for non-work-related injuries or illnesses.

Additional Insurance Considerations

• General Liability Insurance: Although not legally required, general liability insurance protects the business from claims related to bodily injury or property damage arising from operations. It is highly recommended when hiring employees.
• Employment Practices Liability Insurance (EPLI): This coverage helps manage risks related to employee claims such as discrimination or wrongful termination. It supports compliance with employment laws and is worth evaluating based on your business size and risk exposure.

Operational Steps Before Hiring

• Obtain a workers' compensation insurance policy that meets Wisconsin requirements.
• Register with the Wisconsin Department of Workforce Development for unemployment insurance tax accounts.
• Set up payroll systems to handle insurance tax withholdings and reporting.
• Maintain accurate employee records to support insurance claims and compliance audits.

As of 2026, staying current with Wisconsin insurance requirements and timely reporting ensures smooth business operations and reduces liability risks when expanding your workforce.