Do I need workers compensation insurance?

Workers Compensation Insurance Requirements in Indiana

In Indiana, most employers are required to carry workers compensation insurance to cover employee injuries or illnesses that occur on the job. This insurance helps manage financial risk related to workplace accidents and supports employee recovery.

When Workers Compensation Insurance Is Required

• Employers with one or more employees: If you have at least one employee working full-time, part-time, or seasonally, you generally must obtain workers compensation insurance.
• Corporate officers and LLC members: They may be excluded if they have properly elected to opt out, but this requires formal documentation.
• Construction industry: Even if you have just one employee, workers compensation coverage is mandatory in construction trades.
• Farm labor: If you employ agricultural workers, you must also comply with coverage requirements based on employee count and payroll.

Operational Considerations

• Insurance procurement: Obtain coverage through a licensed insurance provider or the Indiana Workers Compensation Insurance Plan if you cannot find private market coverage.
• Payroll tracking: Maintain accurate payroll records as premiums are often calculated based on total payroll and job classifications.
• Employee classification: Classify employees correctly to ensure proper premium rates and compliance.
• Recordkeeping and reporting: Keep injury reports and insurance documentation organized to meet state reporting requirements.
• Compliance monitoring: Stay updated on Indiana Department of Insurance regulations and adjust coverage as your workforce changes.

Exceptions and Additional Notes

As of 2026, sole proprietors and partners without employees are not required to carry workers compensation insurance but may choose to do so voluntarily for protection.

Failure to maintain required workers compensation insurance can result in fines, penalties, and stop-work orders, impacting your business operations.