What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Maryland

When you hire employees in Maryland, certain insurance coverages are mandatory to comply with state operational requirements and protect your business.

Workers' Compensation Insurance

Maryland law requires most employers with one or more employees to carry workers' compensation insurance. This coverage provides benefits to employees who suffer work-related injuries or illnesses. It is critical for compliance and employee protection.

• Obtain a policy through a private insurer or the state Workers' Compensation Commission.
• Ensure timely reporting and recordkeeping of workplace injuries as part of compliance.
• Understand exemptions, such as some sole proprietors or certain family employees, but verify your specific situation.

Unemployment Insurance

Maryland employers must register and contribute to the state Unemployment Insurance (UI) program. This insurance provides temporary benefits to workers who lose their jobs through no fault of their own.

• Register with the Maryland Department of Labor for UI tax accounts.
• Maintain accurate payroll records to calculate and report UI taxes properly.
• Understand reporting requirements and deadlines to avoid penalties.

Additional Operational Considerations

• Disability Insurance: Maryland does not require employer-provided disability insurance, but consider voluntary plans for employee benefits.
• Health Insurance: Under federal law, employers with 50 or more full-time employees must offer health insurance; ensure compliance with applicable federal and state regulations.
• Employee Classification: Correctly classify workers as employees or independent contractors to determine insurance obligations accurately.
• Recordkeeping and Reporting: Maintain all insurance documents, injury reports, and payroll records to meet Maryland’s compliance standards.

As of 2026, regularly review Maryland state updates to insurance requirements and maintain active communication with your insurance providers and state agencies to ensure ongoing compliance.