What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Indiana

When hiring employees in Indiana, businesses must secure specific types of insurance to remain compliant and protect both the company and its workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Indiana employers who have 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.

• Businesses must obtain coverage before employees begin work.
• Failure to maintain workers' compensation insurance can result in penalties and fines.
• Coverage requirements and rates vary based on industry and payroll size.

Unemployment Insurance

Indiana requires employers to register for unemployment insurance through the Indiana Department of Workforce Development. This insurance provides temporary benefits to workers who lose their jobs through no fault of their own.

• Employers must report wages and pay unemployment taxes regularly.
• Proper classification of employees versus independent contractors affects unemployment insurance obligations.

Additional Insurance Considerations

While not legally required, consider the following insurance types to support operational stability:

• General liability insurance to protect against third-party claims.
• Employment practices liability insurance to cover claims related to hiring, termination, or workplace discrimination.

Operational Tips

• Verify insurance coverage before onboarding new employees to avoid compliance gaps.
• Maintain accurate payroll and employee records to support insurance reporting.
• Use automation tools to track insurance renewals and state reporting deadlines.

As of 2026, insurance requirements may be updated, so regularly check Indiana state resources to ensure ongoing compliance.