What insurance is required when hiring workers?

Required Insurance When Hiring Employees in North Carolina

When you hire employees in North Carolina, there are specific insurance requirements to ensure compliance and protect your business and workforce.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most employers in North Carolina. This insurance covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses.

• Employers with three or more employees must carry workers' compensation insurance.
• It applies to full-time, part-time, and temporary workers.
• Coverage must be maintained continuously while employees are on the payroll.

Unemployment Insurance

North Carolina requires employers to register for unemployment insurance. This is a state-managed program that provides temporary benefits to employees who lose their jobs through no fault of their own.

• Employers pay unemployment taxes based on their payroll and experience rating.
• Registration and tax reporting are handled through the North Carolina Division of Employment Security.

Additional Insurance Considerations

While not legally required, consider the following to manage risks effectively:

• General liability insurance: Protects your business from third-party claims related to injuries or property damage.
• Employment practices liability insurance: Covers claims related to hiring, termination, and workplace discrimination.

Operational Tips

• Verify insurance coverage before onboarding new hires to maintain compliance.
• Keep accurate records of insurance policies and employee classifications for reporting and audits.
• Use payroll and compliance software to automate tax filings and insurance reporting.
• Review insurance requirements regularly, as regulations and thresholds may change.