What insurance is required when hiring workers?

Required Insurance When Hiring Employees in Maine

When hiring employees in Maine, it is essential to secure the appropriate insurance coverage to comply with state regulations and protect your business operations.

Workers' Compensation Insurance

Workers' compensation insurance is mandatory for most Maine employers with one or more employees. This insurance covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses.

• Obtain coverage through a private insurance carrier authorized in Maine or the Maine Workers' Compensation Board.
• Maintain accurate records of employee injuries and claims as part of compliance and reporting requirements.
• Failure to carry workers' compensation insurance can result in penalties and fines.

Unemployment Insurance

Employers in Maine must register with the Maine Department of Labor to pay unemployment insurance taxes. While not an insurance policy you purchase, this tax funds unemployment benefits for eligible former employees.

• Register within 15 days of hiring your first employee.
• File quarterly wage and tax reports to maintain compliance.

Disability and Other Insurance

As of 2026, Maine does not require employers to provide state disability insurance. However, employers may choose to offer supplemental disability or health insurance to attract and retain talent.

Additional Operational Considerations

• Employee Classification: Correctly classify workers as employees or independent contractors to ensure proper insurance coverage and tax treatment.
• Recordkeeping: Keep detailed records of all insurance policies, employee coverage, and claims to streamline audits and compliance reviews.
• Payroll Integration: Automate payroll systems to accurately withhold and report insurance-related taxes and contributions.