What insurance is required when hiring workers?

Required Insurance When Hiring Employees in New Jersey

When hiring employees in New Jersey, it is essential to maintain the appropriate insurance coverage to comply with state regulations and protect your business.

Workers' Compensation Insurance

New Jersey requires all employers with employees to carry workers' compensation insurance. This coverage provides benefits to employees who suffer work-related injuries or illnesses. It is mandatory regardless of the number of employees.

• Obtain coverage through a private insurance carrier or the New Jersey State Fund.
• Keep records of all claims and maintain compliance with reporting requirements.
• Failure to maintain workers' compensation insurance can result in penalties and stop-work orders.

Unemployment Insurance

Employers must also register for and pay into the New Jersey Unemployment Insurance program. This is not traditional insurance you purchase but a state-administered program funded by employer payroll taxes.

• Register with the New Jersey Department of Labor and Workforce Development.
• File quarterly wage and tax reports to maintain compliance.

Disability Insurance

New Jersey requires employers to provide Temporary Disability Insurance (TDI) to employees. This insurance covers employees who cannot work due to non-work-related illness or injury.

• Employers can purchase TDI coverage from authorized carriers or through the state plan.
• Maintain accurate payroll and employee classification records for proper premium calculation.

Additional Operational Considerations

• General Liability Insurance: While not required by state law, it is recommended to protect your business from third-party claims.
• Employee Classification: Properly classify workers as employees or independent contractors to ensure insurance compliance and tax accuracy.
• Recordkeeping: Maintain up-to-date insurance certificates and documentation to streamline audits or inspections.
• Payroll Integration: Automate insurance premium calculations and reporting through payroll systems to reduce errors and administrative burden.

As of 2026, regularly review New Jersey state requirements to ensure your insurance coverage meets current standards and operational needs.