Workers' Comp Requirements by State

Requirements research current as of 2026-08-07. Next scheduled verification: 2026-11-05, with a recheck of every cited source on publication day. Written and maintained by the Cover My Trade editorial team · corrections: hello@covermytrade.com.

Workers' comp may be required with one employee — but not in every state, and not for every business. There is no national threshold. Start with the state where each person actually works, then check that state's employee definition, owner and officer rules, industry exceptions, and out-of-state provisions. The variation is real: California's agency says one or more employees triggers the law, Florida sets different thresholds for construction, non-construction, and agricultural work, and Texas says most private employers may choose whether to carry coverage. The current official state rule — not a national list, a competitor's table, or a 1099 label — controls. This page covers that requirement for trade and service businesses of every kind, from contractors and cleaning crews to food trucks and pet-care operators, and flags every state that writes a separate construction rule. It is an educational lookup, not a legal or insurance determination for your specific business: the governing law and the state agency's interpretation always control.

Choose your path in one pass:

• Plan on coverage — and start gathering quote inputs — if anyone performs work for your business in a state whose row shows a first-employee trigger, because in those states the duty can begin with the first person who meets the state's employee definition.
• Check the industry notes in your state's row before trusting a headline number if you do construction or agricultural work, because several states apply different triggers to those operations.
• Treat classification as an open question rather than a settled label if you pay helpers on a 1099 basis, because the state's workers' comp employee definition — not the tax form — decides who counts.
• Confirm the requirement first if your state's row is marked Partial or Blocked, if owners are your only workers, or if people work in more than one state: open the official source linked in your state's row and follow the steps in how to confirm the rule before you rely on any exemption or buy anything.

Go straight to your row: Northeast · Mid-Atlantic and Southeast · South Central and Gulf · Midwest · Mountain West · Pacific and U.S. territories

Every path above is an option to evaluate and quote, not a promise of coverage, eligibility, or price.

Where a state writes a different rule for construction trades, that rule is in the row, and which threshold applies to your trade maps the common trades to the right one. Class-code-level pricing, trade-specific exclusions, and coverage comparisons live on the workers' comp insurance hub and the individual trade pages.

On this page

• Check these six facts before using the table
• States where you must buy from a state fund
• Workers' comp requirements by state
• How the state matrix is verified
• What workers' comp does and does not cover
• The three pieces of workers' comp coverage
• Do I need workers' comp for one employee?
• Exceptions that can change the baseline row
• Premium is an estimate until the audit
• What going without coverage actually costs
• How to confirm the rule and take the next step
• After you're covered: what maintenance looks like
• Terms you'll meet in a contract
• Choosing a provider at a glance
• Frequently asked questions

Check these six facts before using the table

Employee count is only one field in your state's rule. Before you read your row — and before you rely on it — confirm all six of these facts about your own business. Most bad workers' comp decisions come from skipping one of them.

Check	What to confirm	Why it changes the answer
Work state	The state where each person actually performs services — not where your business is registered or headquartered.	Each state's law governs work performed there. Multi-state work can implicate more than one state's rule.
Worker status	Whether each person meets that state's workers' comp definition of an employee.	A 1099 form, a contract label, or an LLC on the worker's side is not dispositive. The state's own test is fact-specific.
Entity and owners	Your entity type, and whether owners, officers, members, or partners are included, excluded, or allowed to elect in or out.	Owner and officer treatment varies by state and entity type. Never assume owners are automatically exempt — or automatically counted.
Industry	Whether your operations fall under construction, agriculture, domestic work, nonprofit, or another category with its own rule.	Several states set different triggers or duties by industry. The general threshold may not be your threshold.
Out-of-state and project facts	Temporary work across state lines, remote workers, public contracts, or specific projects.	Extraterritorial and reciprocity provisions, and public-project rules, can add requirements the baseline row doesn't show.
Contract and coverage route	Whether a client, landlord, lender, or license requires coverage regardless of the law — and whether your state offers a state fund or approved self-insurance route.	A contract may require coverage even when the baseline state rule does not. Approved self-insurance is different from operating without coverage.

First action: find your state in the table below and read its linked rule with these six facts in hand.

Is your trade "construction" for threshold purposes?

This matters more than any other classification question on this page, because eight of the states below write a separate — usually lower — trigger for construction work. The states that do it name the category themselves rather than leaving it to interpretation:

• The states with a separate construction rule are Florida (one employee), Missouri (one, for employers who erect, demolish, alter or repair improvements), Arkansas (two for building or building-repair work, one for a contractor who subcontracts), New Mexico (any employer needing a Construction Industries Licensing Act license), Tennessee (one, for construction service providers), Nevada (construction is outside the casual-employment exemption), Montana (all employees working in Montana, resident or not) and Colorado (a duty to cover your construction contractors or collect their proof).
• How the category is defined is a state question, not a common-sense one. Florida publishes the actual list of construction class codes at Rule 69L-6.021 F.A.C.; New Mexico ties it to whether the work requires a CID license; Missouri ties it to the verbs in the statute. Read your state's definition rather than guessing from your job title.
• The classification follows the work, not the license. Being outside the construction category for threshold purposes does not make your class code low-hazard, and it does not stop a general contractor from requiring coverage by contract.

Which threshold applies to your trade

Find your trade, then read your state's row with this in hand. "Usually" is the operative word in every row: the state's own definition decides, and a single job can move part of your payroll into a construction code.

Trade	Usually "construction" for threshold purposes?	Where that changes the answer	What flips it the other way	Confirm at
Roofing	Yes	All eight separate-rule states; roofing is a core construction classification everywhere it is defined	Nothing routine — assume the construction rule applies	Your state's construction definition, then your row
Electrical	Yes	All eight; New Mexico ties the duty to needing a CID license, which electrical work does	Nothing routine — assume the construction rule applies	Your state's construction definition, then your row
Plumbing and HVAC	Yes	All eight; Massachusetts also gates building permits on a workers' comp affidavit for plumbers	Nothing routine — assume the construction rule applies	Your state's construction definition, then your row
Carpentry, framing, masonry, drywall	Yes	All eight; Missouri's statutory verbs — erect, demolish, alter, repair — describe this work directly	Nothing routine — assume the construction rule applies	Your state's construction definition, then your row
General contracting and remodeling	Yes	All eight; Arkansas drops to one employee for a contractor who subcontracts any part of a contract	Nothing routine — assume the construction rule applies	Your state's construction definition, then your row
Painting	Yes	All eight; painting is repair or alteration of a structure in most state definitions	Interior decorative or faux-finish work with no surface preparation is still usually construction — do not assume otherwise	Your state's construction definition, then your row
Handyman and property maintenance	Usually, and it varies more than any other trade here	All eight, depending on the job mix	Pure fixture swaps and assembly may fall outside; anything altering or repairing the structure does not	Your state's construction definition before you assume the general threshold
Landscaping and lawn care	Usually not	Falls under the general threshold in most states	Hardscaping, retaining walls, irrigation trenching, deck or fence construction, and tree removal can move part of your payroll into construction codes	Your state's construction definition if any part of the work touches a structure or grading
Cleaning and janitorial	Usually not	Falls under the general threshold in most states	Post-construction punch-out cleaning and any work performed as a subcontractor on an active construction site	Your state's construction definition before bidding site work
Food trucks, salons and studios, personal training, photography	No	The general threshold in your row is your threshold	Almost nothing — but a build-out you perform yourself is a different question from the trade you operate	Your row's general threshold
Pet care, dog walking, mobile detailing	No	The general threshold in your row is your threshold	Nothing routine	Your row's general threshold
Home daycare and childcare	No	The general threshold in your row is your threshold, but licensing rules can require coverage independently	Your state's childcare licensing body may impose a coverage condition the workers' comp statute does not	Your row's general threshold, then your state's licensing body

Two things this table cannot do for you. It cannot tell you what your carrier will assign as a class code — that is a rating question, not a threshold question, and the answer moves your premium far more than it moves your requirement. And it cannot override a contract: a general contractor can require coverage from a landscaper or a cleaner on a jobsite regardless of which column this table puts them in.

States where you must buy from a state fund

As of 2026-08-07. Verify each fund's current enrollment process before acting.

Four states do not have a private workers' compensation market. In Ohio, North Dakota, Washington, and Wyoming, employers buy workers' compensation from a state fund (or, where the state allows it, qualify as a certified self-insurer). An agent cannot place your workers' comp policy in these states — you register with the fund directly. Two U.S. territories work the same way: Puerto Rico through the State Insurance Fund Corporation, and the U.S. Virgin Islands through the Government Insurance Fund.

State	Fund	Private workers' comp available?	Employer's liability included?	How to get employer's liability
Ohio	Bureau of Workers' Compensation	No — BWC or certified self-insurance	No	Stop-gap endorsement attached to your general liability policy
North Dakota	Workforce Safety & Insurance	No — WSI only	No	Stop-gap endorsement attached to your general liability policy
Washington	Department of Labor & Industries	No — L&I or certified self-insurance	No	Stop-gap endorsement attached to your general liability policy
Wyoming	Department of Workforce Services	No for extra-hazardous industries; optional employers may buy privately	No	Stop-gap endorsement attached to your general liability policy

The gap that matters: in a competitive-market state, a workers' comp policy has two parts. Part 1 pays the statutory benefits. Part 2 — employer's liability — responds when an injured worker sues you in negligence, alleging an unsafe site or inadequate training, in the situations where the exclusive-remedy bar does not apply. A monopolistic state fund policy has no Part 2. If you work in one of these four states and a general contractor's insurance exhibit demands an employer's liability limit, you satisfy it with a stop-gap endorsement on your general liability policy — not from the fund, and not automatically. Ask your agent to confirm stop-gap is attached and that its limit meets the contract before you send a certificate. What an employer's liability limit actually says explains how to read the three figures a contract will name.

Two more consequences trades crews hit regularly. First, a monopolistic fund policy generally cannot cover work performed outside that state, so a crew crossing a state line needs coverage arranged in the other state as well. Second, several competitive-market states require their own state to be named on the policy itself before they will treat you as covered there — New York and Virginia both say the state must appear on Item 3.A of the information page rather than the all-states Item 3.C listing.

Workers' comp requirements by state

One row per state, the District of Columbia, and five U.S. territories — 56 jurisdictions, verified 2026-08-07 against the linked official source. Baseline triggers are summaries of that source; the full rule, its exceptions, and the agency's interpretation control. Owner, officer, and entity treatment is not exhaustively verified for every jurisdiction — that is the limitation on every row.

State-by-state rows verified 2026-08-07 against each linked official source

Northeast

Jurisdiction	Baseline trigger	Key exceptions and trade notes	Official source	As-of / status
Connecticut	One or more employees, full-time, part-time or seasonal.	Household employees working under 26 hours a week are excluded. Sole proprietors, partners, LLC members and some corporate officers may exempt themselves. Stop-work orders are available to the Commission.	Connecticut WCC — About Workers' Compensation Insurance	2026-08-07 — Verified with limitation
Maine	One or more employees.	Sub documentation affects your premium: without an approved predetermination of independent-contractor status, your insurer may treat the contractor's employees as yours and count their payroll when calculating your premium. Some agriculture and aquaculture employers are exempt if they hold stated employer's liability and medical limits.	Maine Bureau of Insurance — An Employer's Guide to Workers' Compensation	2026-08-07 — Verified with limitation
Massachusetts	All employers, under MGL c.152 §25A.	Permit gate for trades: builders, contractors, electricians and plumbers must file a workers' compensation affidavit with the permitting city or town. Failure to secure coverage carries criminal penalties, a stop-work order and daily fines. Officers owning 25% or more may elect out on Form 153.	Massachusetts — General Laws Chapter 152	2026-08-07 — Verified with limitation
New Hampshire	Any employees, full or part time, including family members and nonprofit staff (RSA 281-A:5).	Sole proprietors and partners are not required to cover themselves but may elect in. A general contractor may require a sole-proprietor subcontractor with no employees to carry coverage anyway — that is a contract duty, not a statutory one.	New Hampshire DOL — Workers' Compensation Insurance FAQs	2026-08-07 — Verified with limitation
New Jersey	All New Jersey employers outside federal programs must carry coverage or hold approved self-insurance.	The rule is entity-specific: corporations from the first person performing services, including officers; partnerships and LLCs excluding partners and members; sole proprietorships excluding the principal owner. Out-of-state employers can be reached where the hiring contract is made in New Jersey or the work is performed there.	New Jersey DOL — Employer Requirements	2026-08-07 — Verified with limitation
New York	The state board says virtually all New York employers must provide coverage (WCL §§2, 3), with a posting duty under §51.	The board maintains per-situation subpages for family members, for-profit corporations with no employees, out-of-state employers and more. An out-of-state employer with New York work generally needs New York listed on Item 3.A of its policy; a 3.C listing may not suffice.	New York Workers' Compensation Board — Coverage Requirements	2026-08-07 — Verified with limitation
Pennsylvania	One or more employees who could be injured or develop a work-related disease in Pennsylvania.	An employer escapes the duty only if every worker falls into an excluded category. Nonprofits are not exempt. Family members on payroll count. Agricultural and domestic employment have their own wage and hour tests.	Pennsylvania DLI — LIBC-200 Employer Information	2026-08-07 — Verified with limitation
Rhode Island	One or more employees.	Individual owners and partners are exempt; most corporate officers are included under the Act. An independent contractor must file a DWC-11-IC designation for each hiring entity. Penalties reach $1,000 per uninsured day, and the Director may close the business.	Rhode Island DLT — For Employers	2026-08-07 — Verified with limitation
Vermont	One or more employees, full or part time (21 V.S.A. ch. 9).	Up to four corporate officers or LLC members may be excluded with prior approval from the Department of Labor. Casual work outside the employer's trade, and farm employment with aggregate payroll under $10,000, are excluded.	Vermont DOL — Workers' Compensation Fact Sheet for Employers	2026-08-07 — Verified with limitation

Mid-Atlantic and Southeast

Jurisdiction	Baseline trigger	Key exceptions and trade notes	Official source	As-of / status
Delaware	One or more employees; coverage must be in place before any employee starts work (19 Del. C. §2306).	Farm workers are outside the statute but the employer may elect coverage. Independent contractors are not employees, but the classification is fact-driven.	Delaware Division of Industrial Affairs — When Is an Employer Required to Carry Coverage	2026-08-07 — Verified with limitation
District of Columbia	One or more employees.	Domestic employment triggers the duty at 240 hours or more in a calendar quarter. Employers with workers outside DC need coverage under the other jurisdiction's law as well.	DC DOES — Workers' Compensation	2026-08-07 — Verified with limitation
Florida	Varies by industry: construction, one or more employees; non-construction, four or more; agriculture, six regular or twelve seasonal workers under stated conditions.	The sub rule is statutory: contractors must confirm every subcontractor's coverage before work begins, and if a sub lacks coverage for its employees, those workers become the contractor's employees. Rule 69L-6.032 lists the documentation to collect; 69L-6.021 lists the construction trades.	Florida DFS — Coverage Requirements	2026-08-07 — Verified with limitation
Georgia	Three or more employees regularly employed, full-time, part-time or seasonal.	Officer exemptions do not reduce the count: corporate officers and LLC members count toward the three even when they waive coverage on themselves. Railroads, federal agencies, farm laborers and domestic servants are excluded.	Georgia SBWC — Workers' Compensation Insurance FAQs	2026-08-07 — Verified with limitation
Maryland	One or more employees, full or part time.	Agricultural employers with fewer than three employees or under $15,000 in annual payroll are outside the requirement. Corporate officers can be held personally liable for the fine when a corporation fails to pay it. Source limitation: the linked Commission page is written for employees; the governing provision is Md. Code, Lab. & Empl. §9-402 — confirm the employer-facing rule with the Commission.	Maryland Workers' Compensation Commission	2026-08-07 — Partial
North Carolina	Three or more employees regularly employed.	Corporate officers count toward the three even when excluded — a corporation with two officers and one employee needs coverage. Employment involving the use or presence of radiation triggers at one employee. Agriculture under ten workers, some sawmill and logging operations, and domestic employees are excluded.	North Carolina Industrial Commission — Employers	2026-08-07 — Verified with limitation
South Carolina	Four or more employees regularly employed, including part-time workers and family members.	Employers with an annual payroll under $3,000 the previous calendar year are excluded regardless of headcount (S.C. Code §42-1-360), as are agricultural employment, casual employees and railroads. A general contractor can be liable for an uninsured subcontractor's employees.	South Carolina Code of Laws — Title 42, Chapter 1	2026-08-07 — Verified
Virginia	More than two employees regularly employed — and a contractor counts its subcontractors' employees toward the total, even when those subs carry their own coverage.	Executive officers count. Where the combined total exceeds two, coverage is mandatory with no waivers and no exceptions. Your carrier can charge premium for any subcontractor you hire, including a sole proprietor with no employees — though the Commission also states you should not be charged for a sub that carries its own coverage. Out-of-state employers generally need Virginia on Item 3.A; a 3.C listing is not sufficient.	Virginia WCC — Workers' Compensation Insurance Information for Employers	2026-08-07 — Verified with limitation
West Virginia	Nearly all employers with employees, under W. Va. Code ch. 23.	Sources differ on how the small-employer and temporary-employment exclusions apply, so confirm your situation with the Offices of the Insurance Commissioner rather than relying on a summary. Employers granted an exemption letter by the Commissioner are outside the requirement. Coverage has been sold by private carriers since 2006.	West Virginia Offices of the Insurance Commissioner — Workers' Compensation	2026-08-07 — Verified with limitation

South Central and Gulf

Jurisdiction	Baseline trigger	Key exceptions and trade notes	Official source	As-of / status
Alabama	Five or more employees regularly employed, including corporate officers and LLC members.	Construction or on-site assistance in constructing new single-family detached dwellings requires coverage regardless of headcount. Domestic, farm labor, casual employees and municipalities under 2,000 people are excluded but may elect in.	Alabama Department of Labor — Insurance Requirement Information	2026-08-07 — Verified with limitation
Arkansas	Three or more employees.	Trade thresholds are lower: building or building-repair work requires coverage at two employees, and a contractor who subcontracts any part of a contract requires coverage at one. Farm labor, domestic help and certain nonprofits are excluded.	Arkansas Department of Labor and Licensing — AWCC Basic Facts	2026-08-07 — Verified with limitation
Kentucky	One or more employees regularly employed in the same business (KRS 342.630).	Owners, partners, LLC members and officers may elect exemption by filing with the Department of Workers' Claims; the election must be renewed. A lapsed exemption certificate is a common problem on GC-compliance job sites. A waiver of subrogation is not available on a Kentucky workers' comp policy under the standard endorsement.	Kentucky Revised Statutes — Chapter 342	2026-08-07 — Verified with limitation
Louisiana	One or more employees, including full-time, part-time, seasonal and minors.	Subcontractors and independent contractors can be treated as employees where they perform substantial manual labor or work in the pursuit of the employer's business. Domestic employees and most real estate salespeople are excluded.	Louisiana Workforce Commission — Coverage for Employers	2026-08-07 — Verified with limitation
Mississippi	Five or more employees regularly employed (Miss. Code §71-3-5).	Under five, coverage is voluntary. Independent contractors, domestic workers, farm labor and certain nonprofits are excluded. Officers owning 15% or more may exempt themselves in writing.	Mississippi Workers' Compensation Commission — Workers' Compensation Facts	2026-08-07 — Verified with limitation
Oklahoma	One or more employees, including a single part-time employee.	Businesses that qualify for an exemption file an Affidavit of Exempt Status (CC-Form-36A) with the Commission under 85A O.S. §36; the affidavit expires two years from filing unless canceled earlier on CC-Form-36C. Domestic and agricultural employers below stated payroll levels are excluded. Repeat non-compliance can trigger an order to cease business activity. Source limitation: the linked employer FAQ is published by the Workers' Compensation Court of Existing Claims, the predecessor body; the current administrator is the Oklahoma Workers' Compensation Commission — confirm current guidance with the Commission before relying on this row.	Oklahoma Workers' Compensation — Employer's FAQ	2026-08-07 — Partial
Tennessee	Five or more employees — but construction service providers need coverage at one or more employees unless listed on the state Exemption Registry, and coal mining triggers at one.	Corporate officers and family members meeting the employee definition count toward the five even if they decline coverage. Dropping below five requires filing Form I-3 and waiting for the Bureau to accept it. Exempt construction owners must still cover every employee, even a single one.	Tennessee DOL — Which Employers Are Required to Provide Benefits	2026-08-07 — Verified with limitation
Texas	Most private employers may choose whether to carry workers' comp; coverage is not required in most cases.	Going without is not free. Nonsubscribers must file Form DWC-005 annually and post notice, and they forfeit the common-law defenses of contributory negligence, assumption of risk and fellow-employee negligence, and lose exclusive-remedy protection — so an injured employee can sue directly for full tort damages (Tex. Lab. Code ch. 406). Nonsubscribers with five or more employees also report injuries on DWC-007. Public and some building-contract work can still require coverage.	Texas DWC — Employer Resources	2026-08-07 — Verified with limitation

Midwest

Jurisdiction	Baseline trigger	Key exceptions and trade notes	Official source	As-of / status
Illinois	Nearly all employers — coverage is required for almost everyone hired, injured, or whose employment is localized in Illinois.	Sole proprietors, partners, corporate officers and LLC members may exempt themselves. A knowing failure to insure removes exclusive-remedy protection and lets the injured worker sue in civil court, where benefits are unlimited.	Illinois WCC — Insurance	2026-08-07 — Verified with limitation
Indiana	Effectively all employers with employees, under IC 22-3-2-2.	An Indiana policy is presumed to cover all the employees and the entire compensation liability of the insured, so exposures within one legal entity cannot be split across policies. Independent contractors file for an exemption certificate.	Indiana Workers' Compensation Board — Employers	2026-08-07 — Verified with limitation
Iowa	Most employers with employees, under Iowa Code §87.1.	Proprietors, partners and LLC members are outside coverage but may elect in; up to four corporate officers may reject coverage by filing. Uninsured employers lose exclusive-remedy protection and face full tort exposure.	Iowa DIAL — Workers' Compensation Compliance	2026-08-07 — Verified with limitation
Kansas	Payroll-based, not headcount: gross annual payroll over $20,000 in a calendar year (K.S.A. 44-505).	All payroll counts, paid in Kansas or elsewhere. For sole proprietors and partnerships, wages to owners and their family members are excluded from the calculation; for corporations they are not. Watch the threshold mid-year. State law also limits how far a construction contract may require a waiver of subrogation.	Kansas Department of Labor — Workers Compensation Overview	2026-08-07 — Verified with limitation
Michigan	Two alternative triggers: three or more employees at any one time, or one or more employees working 35 hours or more per week for 13 weeks or longer in the preceding 52 weeks.	A partner is an employee of the partnership, a corporate officer an employee of the corporation, and an LLC member who is a manager an employee of the LLC. A sole proprietor is never an employee of their own sole proprietorship.	Michigan LEO — Workers' Disability Compensation Insurance Requirements	2026-08-07 — Verified with limitation
Minnesota	No minimum number of employees — one part-time employee generally triggers the duty (Minn. Stat. §176.181 subd. 2).	Household workers earning under $1,000 in a three-month period, some farm situations and certain family arrangements are excluded. DLI publishes a construction-contractor-specific guide because the exceptions are widely misread.	Minnesota DLI — Who Needs Workers' Compensation Coverage	2026-08-07 — Verified with limitation
Missouri	Five or more employees — but construction employers who erect, demolish, alter or repair improvements need coverage at one or more employees.	LLC members and corporate officers count toward the five; sole proprietors and partners do not, and are not covered themselves unless they elect in with the insurer.	Missouri DOLIR — Workers' Compensation Insurance	2026-08-07 — Verified with limitation
Nebraska	One or more employees in the regular trade, business, profession or vocation of the employer.	Agricultural operations employing only related workers are exempt; unrelated-employee farms trigger at ten full-time workers for 13 calendar weeks. There is no state fund; coverage comes from licensed private insurers or approved self-insurance.	Nebraska Workers' Compensation Court — Employer FAQ	2026-08-07 — Verified with limitation
North Dakota	All employers must insure all employees — full-time, part-time, seasonal and occasional — before employees begin working (N.D.C.C. Title 65).	Monopolistic: private insurers may not write workers' comp in North Dakota, and employers cannot self-insure as an alternative to WSI. An uninsured employer can be liable for claim costs and reserves and faces a $10,000 penalty plus $100 per day. Coverage is required if you come into North Dakota and hire workers there.	North Dakota WSI — Coverage Requirements	2026-08-07 — Verified with limitation
Ohio	One or more employees.	Monopolistic: BWC is the exclusive provider for state-fund employers. Coverage is elective for sole proprietors, partners, LLC members acting as a sole proprietorship or partnership, family-farm corporate officers, individuals incorporated with no employees, and ministers — but all regular employees must still be covered.	Ohio BWC — Getting Coverage	2026-08-07 — Verified with limitation
South Dakota	Elective. State law does not mandate workers' compensation; the Department strongly recommends it.	An employer without coverage can be sued and may face double the disability or death compensation the law allows. Carrying coverage is what buys exclusive-remedy protection. Domestic servants under stated hour thresholds, farm labor and certified independent contractors sit outside coverage even where an employer elects in.	South Dakota DLR — Workers' Compensation	2026-08-07 — Verified with limitation
Wisconsin	Two triggers with hard dates: three or more employees — insurance required on the day you employ the third person; or one or more employees paid $500 or more in gross combined wages in any calendar quarter — insurance required by the 10th day of the first month of the next quarter (Wis. Stat. §102.04(1)(b)).	Farms trigger at six workers on the same day for 20 days in a calendar year. An excluded officer still counts toward the three and their wages still count toward the $500. Withdrawing requires a full clean calendar year plus a filed notice and a 30-day wait.	Wisconsin DWD — Worker's Compensation Employer Resources	2026-08-07 — Verified with limitation

Mountain West

Jurisdiction	Baseline trigger	Key exceptions and trade notes	Official source	As-of / status
Arizona	One or more employees, full or part time.	An LLC with employees must cover them. Corporate officers and directors are presumed employees unless they opt out on a Commission form. Source limitation: the linked Commission FAQ carries a 2020 revision date — confirm current guidance with the Commission.	Industrial Commission of Arizona — Employers' FAQ	2026-08-07 — Partial
Colorado	One or more employees, full-time, part-time or family.	Construction-specific duty: if you use contractors for construction work you must either provide coverage to them or collect proof of coverage or a filed rejection from everyone you contract with directly. Fines run to $500 per uninsured day.	Colorado DLE — Workers' Compensation Insurance Requirements	2026-08-07 — Verified with limitation
Idaho	One or more full-time, part-time, seasonal or occasional employees; coverage must be in place before the first hire.	Contract workers may be employees under the law; the Commission decides case by case using a right-to-control test. Operating uninsured is a misdemeanor and the Commission can seek an injunction closing the business.	Idaho Industrial Commission — Employers FAQs	2026-08-07 — Verified with limitation
Montana	Nearly all employers with employees (Mont. Code Ann. §39-71-401).	Construction is stricter: construction employers must cover all employees working in Montana, resident and non-resident. Before hiring an independent contractor, confirm a state-issued exemption certificate or proof of coverage — without it you can be held responsible for claims and charged premium on their wages.	Montana DLI — Insurance Requirements	2026-08-07 — Verified with limitation
Nevada	One or more employees (NRS 616B.633).	The casual-employment exemption does not reach construction: construction trades are required to carry coverage, and a sole proprietor holding a contractor's license under NRS 624.020 must secure coverage while operating within its scope.	Nevada SilverFlume — Which Employers Must Provide Workers' Compensation	2026-08-07 — Verified with limitation
New Mexico	Three or more workers.	Construction is exempt from the threshold: employers doing work requiring a license under the Construction Industries Licensing Act need coverage regardless of headcount. Executive employees count toward the three even when they exclude themselves. Requirements are not enforced on tribal lands unless the tribe elects.	New Mexico Workers' Compensation Administration — FAQs	2026-08-07 — Verified with limitation
Utah	Every employer, with few exceptions (Utah Code §34A-2-201).	Uninsured subs become your exposure: individuals with no employees who hire out their services can be statutory employees of the hiring business unless they hold a Workers' Compensation Coverage Waiver. Corporations that contract out their work — construction contractors specifically — cannot use the director/officer exclusion and must apply for a waiver instead. Utah uses a state-specific waiver-of-subrogation endorsement rather than the national form.	Utah Labor Commission — Employers' Guide to Workers' Compensation	2026-08-07 — Verified with limitation
Wyoming	Industry-based, not headcount: employers in extra-hazardous industries — determined by NAICS code under W.S. §27-14-108 — must have coverage through the Department before work begins in Wyoming.	Monopolistic for the mandatory population; employers outside the extra-hazardous list may elect coverage, and the Department of Insurance states that these exempt employers may buy from private insurers on the open market. Every business registers through WYUI to learn its status.	Wyoming DWS — Workers' Compensation for Employers	2026-08-07 — Verified with limitation

Pacific and U.S. territories

Jurisdiction	Baseline trigger	Key exceptions and trade notes	Official source	As-of / status
Alaska	One or more employees in Alaska.	Alaska has no reciprocity with any other state: an out-of-state employer with employees working in Alaska must insure the Alaska exposure. Certain owners and 10%-or-more executive officers may be exempt from covering themselves.	Alaska DOLWD — Workers' Compensation Requirements for Employers	2026-08-07 — Verified with limitation
California	One or more employees; the agency says all California employers must provide benefits under Labor Code §3700.	Failing to secure coverage is a criminal offense in California. Sole proprietors may buy coverage on themselves only if the policy states it or an endorsement adds it. California uses a state-specific waiver-of-subrogation endorsement rather than the national form.	California DWC — Employer FAQs	2026-08-07 — Verified with limitation
Hawaii	One or more employees, full or part time, permanent or temporary.	Exclusions are set by HRS §386-1. Hawaii also layers temporary disability insurance and prepaid health care duties on the same employers. Source limitation: the linked page is the Division's general overview rather than a dedicated employer requirement page — confirm your situation with the Division.	Hawaii DLIR — Disability Compensation Division	2026-08-07 — Partial
Oregon	One or more subject workers — every Oregon worker is a subject worker unless one of roughly 30 statutory exceptions applies (ORS 656.027).	A 2022 change made anyone performing services for pay a worker unless they are an independent contractor under ORS 670.600. Non-complying employers reimburse the Division for all claim costs and face escalating penalties.	Oregon WCD — Workers' Compensation Insurance Overview	2026-08-07 — Verified with limitation
Washington	Any workers, whether employees or independent contractors, may trigger the duty — check the state's independent-contractor test.	Monopolistic: private workers' comp coverage is not permitted; you buy from L&I or become a certified self-insurer. Premium is calculated on hours worked rather than payroll, and workers pay a portion by payroll deduction.	Washington L&I — Do I Need a Workers' Comp Account?	2026-08-07 — Verified with limitation
Puerto Rico	One or more workers, under Act No. 45 of April 18, 1935.	Monopolistic: the State Insurance Fund Corporation is the exclusive insurer and private coverage may not be substituted. The policy year runs 1 July to 30 June and must be renewed annually on a filed payroll statement. An insured employer has immunity; an uninsured one does not, and the Fund seeks reimbursement of compensation and medical costs. An insured employer can be subsidiarily liable for the workers of an uninsured contractor — collect proof from every sub.	State Insurance Fund Corporation — About Us	2026-08-07 — Verified with limitation
U.S. Virgin Islands	One or more employees, whatever their wages, including contractors and subcontractors (24 V.I.C. ch. 11, §250 et seq.).	Monopolistic: coverage is purchased through the Government Insurance Fund; private carriers, self-insurance and group self-insurance are not permitted, and there is no small-employer exemption. Individual owners and partners are not employees but may elect coverage if they work full time in the business. A contractor is liable to reimburse the Fund for benefits paid to a subcontractor's employees. Failure to insure carries a fine up to $5,000 under §277.	Virgin Islands Department of Labor — Workers' Compensation Overview	2026-08-07 — Verified with limitation
Guam	Employers are required to carry workers' compensation coverage through an authorized carrier under 22 GCA ch. 9.	Not monopolistic: coverage is written by private carriers and administered through the Workers' Compensation Commission within the Guam Department of Labor, which also handles injury reporting on forms GWC-201 and GWC-202. Not established from the accessible official source: whether Guam sets a minimum employee count, and how owners, officers and independent contractors are treated. Contact the Commission before relying on any exemption.	Guam DOL — Workers' Compensation Commission	2026-08-07 — Partial
American Samoa	Any business operating in American Samoa must secure workers' compensation insurance with an authorized local carrier.	Not monopolistic: coverage is placed with local carriers and administered by the American Samoa Workmen's Compensation Commission. Employers claiming exempt status must still file a Compliance Certificate with the Commission to verify that status — an unfiled exemption is not an exemption. The Commission conducts site visits and expects the insurance and compliance certificate to be on hand.	American Samoa Workmen's Compensation Commission	2026-08-07 — Verified with limitation
Northern Mariana Islands	Every employer in the Commonwealth must secure coverage for employees against occupational injury, illness or death.	Not monopolistic: coverage is written by private carriers. A Certificate of Compliance (Form WCC-100) plus a copy of the policy must be filed with the Workers' Compensation Commission within 30 days of procuring or renewing coverage. Business-license gate: every business-license applicant must obtain a Certificate of Clearance from the Commission before Finance will issue the license. Failure to secure coverage carries a civil penalty of $100 per day.	CNMI Department of Commerce — Workers' Compensation Commission	2026-08-07 — Verified with limitation

Next step: open the official source in your row, read it against the six facts above, and gather the documents in how to confirm the rule before you rely on an exemption or request coverage.

How the state matrix is verified

Every consequential cell above is held to one evidence rule: a current governing source — the state statute, administrative code, workers' compensation agency, or an official employer guide or form — opened and logged for that specific jurisdiction on the date shown. We do not fill a row from a competitor's table, a search snippet, an AI summary, or a neighbouring state's rule. Each row carries its own source, the date we verified it, and one of the status labels below.

Status	What it means here
Verified	A current primary source directly supports the row and its applicability.
Verified with limitation	The primary source supports the claim shown, but a material scope, entity, industry, or interpretation question is still open — the limitation is stated in the row.
Partial	Some fields are verified; a required field is missing or rests only on a dated, archived, or non-employer-facing official page. A Partial row cannot support a consequential conclusion on its own.
Blocked	The governing source has not been opened and logged, is inaccessible, or conflicts with another current source. Blocked never means coverage is not required.
Not applicable	The field genuinely does not apply to the row, with the reason stated. Never a substitute for a blank.
Superseded	A newer governing source has replaced the one previously used; the row is being re-verified.

Why most rows read "Verified with limitation" rather than "Verified." Each baseline trigger is supported by the linked official source. What is not exhaustively verified for all 56 jurisdictions is the complete set of owner, officer, entity-type, industry, and extraterritorial exceptions — those run to dozens of provisions per jurisdiction. So the trigger is sourced; the full exception map is not, and the row says so. One row — South Carolina — reads simply "Verified" because the linked source is the current statute itself.

Four rows carry the Partial label because the best official page we could open is dated, employee-facing, non-specific, or published by a predecessor agency:

• Arizona — the Commission FAQ carries a 2020 revision date.
• Maryland — the Commission page we could open is written for employees; the governing provision is Md. Code, Lab. & Empl. §9-402.
• Oklahoma — the employer FAQ is published by the Workers' Compensation Court of Existing Claims; the current administrator is the Workers' Compensation Commission.
• Hawaii — the accessible Division page is a general overview rather than an employer requirement page.

One further row is flagged inside the row itself: Guam, where the accessible official source establishes the duty to insure but not the employee threshold or the owner and contractor treatment.

Two more disclosures belong here rather than inside a row. West Virginia: sources differ on the reach of the small-employer and temporary-employment exclusions. South Dakota: the Department's own guidance describes coverage as recommended rather than required, and several widely-read commercial summaries describe South Dakota as mandatory. Where they diverge, the Department controls — but the divergence is real and worth knowing about before you rely on a summary from anywhere, including this page.

One rule matters more than any other when you read this table: a blank, pending, or Blocked cell never means "no requirement," "no exception," or "zero." It means the verification work for that field is not done.

What workers' comp does and does not cover

Before you look up your threshold, know what the policy on the other side of it actually does. A workers' comp policy is narrow by design, and most of the surprises trades owners hit come from the second column, not the first.

Workers' comp generally pays	Workers' comp generally does not pay
Medical treatment for a covered employee's work-related injury or occupational disease, usually with no deductible or copay to the worker	Your own injuries, if you are an owner who elected out — an election removes your benefits, not just your premium
Wage-replacement (disability) benefits while a covered employee cannot work	Injuries to a subcontractor's employees when that subcontractor carries its own coverage — their policy responds, not yours
Death benefits to a covered worker's dependents	Injury or illness that does not arise out of and in the course of employment; the state decides that question, not you
In most states, an employer's liability part (Part 2) that responds when an injured worker sues the employer in negligence	Employer's liability in Ohio, North Dakota, Washington, and Wyoming — the state fund policy pays statutory benefits only
Statutory benefits set by the state, not by negotiation	Damage to property, tools, vehicles, or your customer's work — those are general liability, inland marine, and commercial auto exposures

Three boundaries that catch trades owners specifically. Workers' comp is not general liability, so it does nothing for damage you cause to a customer's home. A workers' comp policy does not, by itself, satisfy a general contractor's insurance exhibit, which usually also demands general liability limits and specific endorsements. And the two policies most trades owners already hold do not stretch to cover the business: a personal auto policy generally excludes business use of the vehicle, and a homeowners policy generally excludes a trade operated from the home. Driving to jobs on a personal policy and running a business out of a garage are the two most common uncovered-claim scenarios in the trades — neither is a workers' comp question, and both are worth settling before you assume you are covered. Start with what insurance does my business need if you have not sorted the coverage categories yet.

The three pieces of workers' comp coverage

A workers' comp policy is really three things, and a general contractor's insurance exhibit will name at least two of them. Each block below carries the same fields in the same order, so you can compare them directly and take the right questions into a quote.

As of 2026-08-07. Policy structure below follows the standard NCCI Workers Compensation and Employers Liability Insurance Policy; your actual policy wording, endorsements, and state amendments control.

Workers' compensation benefits (Part 1)

Field	Detail
What it does	Pays the benefits your state's workers' compensation statute requires for a covered employee's work-related injury or occupational disease — medical treatment, wage replacement, death benefits.
Who requires it and on what basis	Statute, per your jurisdiction's row above. Also frequently a contract requirement from a general contractor, client, landlord, or licensing body, which can be stricter than the statute.
Typical trigger to buy	The moment you cross your state's threshold — see your row. In several states the duty attaches before the first employee starts work, not after.
What it does not cover	Anything that is not a covered employee's work-related injury. Not your customer's property, not your tools, not your vehicles, not an injury to a member of the public, and not an owner who elected out. Not employer's liability in the four monopolistic fund states.
Trade-specific exclusions to check	Varies by state and trade. Ask specifically about excluded worker categories in your state — domestic, agricultural, casual, and family employment carve-outs are the ones trades businesses trip over.
How premium is rated and the drivers	Class code applied to payroll, adjusted by your experience modification. Washington rates on hours worked rather than payroll. Drivers: operations and their class codes, payroll, state, claims history, and subcontractor use.
Typical limit structure	No dollar limit — benefits are whatever the statute requires. Deductible options may be available depending on the state.
Endorsements commonly required by GCs	A waiver of subrogation (see Part 2 below). Additional insured status is generally not available on workers' compensation.
Audit exposure	High. Premium is an estimate reconciled against actual payroll and codes at term end. Payments to subs who cannot produce their own coverage are commonly charged as your payroll.
Evidence confidence	Requirement verified per jurisdiction above. Pricing and eligibility are underwriting-dependent — quote required.
What to confirm with your agent	Which class code was assigned to each part of your operations and why · the payroll estimate and the audit basis · the exact date coverage attaches relative to a hire's start date · whether owners are included or excluded and what that does to your benefits.
Trigger to revisit	A new hire, a new state, a new service line, a contract with an insurance exhibit, renewal.

Employer's liability (Part 2)

Field	Detail
What it does	Responds when an injured worker sues you in negligence — an unsafe site, inadequate training, defective equipment — in the situations where the exclusive-remedy bar does not apply. Part 1 pays the statutory benefits; Part 2 defends and pays damages in the lawsuit.
Who requires it and on what basis	No statute requires it separately — it is attached to the standard policy in competitive-market states. It is routinely a contract requirement: GC insurance exhibits commonly specify employer's liability limits alongside general liability limits. That is a negotiable contract term, not law.
Typical trigger to buy	Automatic with a competitive-market workers' comp policy. Requires deliberate action in Ohio, North Dakota, Washington and Wyoming, where the fund policy does not include it.
What it does not cover	Claims that fall squarely inside the statutory benefit system — those are Part 1. Injuries to people who are not your employees. Liability you assumed under a contract that runs broader than the policy: an indemnity clause can obligate you well past what Part 2 will pay. It does not exist at all on a monopolistic state fund policy.
Trade-specific exclusions to check	Varies by carrier and endorsement. Ask directly about work at height, hot work, excavation and trenching, and any operation your carrier has excluded by endorsement.
How premium is rated and the drivers	Included in the workers' comp premium at standard limits; increased limits are rated as an additional charge. Drivers follow Part 1.
Typical limit structure	Three figures, always in the same order on Item 3.B of the policy information page: bodily injury by accident — each accident; bodily injury by disease — policy limit; bodily injury by disease — each employee. When a GC exhibit lists three numbers under "Employer's Liability," those are the three, in that order. Standard limits are set by jurisdiction — the North Carolina Rate Bureau, for example, sets the standard each-accident and each-employee limits at $100,000 for that state. Higher limits are available; check the limit your contract demands against the limit your policy carries.
Endorsements commonly required by GCs	The Waiver of Our Right to Recover from Others Endorsement, NCCI form WC 00 03 13 — the waiver of subrogation. It applies only to the extent you perform work under a written contract requiring it, and only in favor of the party named in its schedule. A premium charge may apply. It is not applicable in Kentucky, New Hampshire and New Jersey, and California, Utah and Texas use state-specific forms instead.
Audit exposure	Follows Part 1.
Evidence confidence	Policy structure verified against rating-bureau documentation. Limits, endorsement availability and cost are carrier- and state-dependent — quote required.
What to confirm with your agent	Which three employer's liability limits your policy carries against what the exhibit demands · whether the waiver of subrogation is available in your state and for this project, and what it costs · whether every state your people work in appears on Item 3.A · whether the exhibit's indemnity clause runs broader than Part 2 will pay.
Trigger to revisit	A new contract with an insurance exhibit, a crew crossing a state line, a new high-hazard operation, renewal.

Stop-gap employer's liability

Field	Detail
What it does	Supplies employer's liability cover in the four monopolistic fund states — Ohio, North Dakota, Washington and Wyoming — where the fund policy has no Part 2. It is an endorsement on your general liability policy, not on your workers' comp.
Who requires it and on what basis	Contract, almost always: a GC exhibit demanding an employer's liability limit for work in a fund state cannot be satisfied by the fund policy. No statute requires it.
Typical trigger to buy	Any employees in Ohio, North Dakota, Washington or Wyoming — and immediately if a contract for work in those states names an employer's liability limit.
What it does not cover	Statutory benefits — those come from the fund, and stop-gap is not a substitute for registering with it. It generally does not respond outside the fund states it names.
Trade-specific exclusions to check	Varies by carrier. Confirm the endorsement names every fund state you work in, and check for the same height, hot-work and excavation exclusions that can sit on the underlying general liability policy.
How premium is rated and the drivers	Rated on the general liability policy. Quote required.
Typical limit structure	Set on the general liability policy, commonly mirroring the three-part employer's liability structure above. Confirm the actual limit — it is not automatically equal to your general liability limit.
Endorsements commonly required by GCs	Stop-gap itself is the endorsement. Ask for it by name — it is not automatic.
Audit exposure	Follows the general liability policy's audit basis.
Evidence confidence	Absence of Part 2 on fund policies verified against each fund's own guidance. Endorsement availability and limits are carrier-dependent — quote required.
What to confirm with your agent	That stop-gap is actually attached and named on the policy · which fund states it names · what limit it carries against the contract · whether the certificate you send will show it.
Trigger to revisit	Adding a fund state, a new contract for work in one, renewal.

Where the coverage actually comes from

Four routes exist, and your jurisdiction's row decides which are open to you. They are not interchangeable, and only one of them is a decision you make alone.

Route	Where it exists	Who it is for	What you actually do	What to confirm
Voluntary private market	Every competitive-market state and Guam, American Samoa and the Northern Mariana Islands	Most employers with a clean or ordinary loss history	Quote through a licensed producer or an authorized carrier; bind; receive a policy and certificate	That the carrier is authorized in every state your people work in; the class codes assigned; the audit basis
State fund	Ohio, North Dakota, Washington, Wyoming, Puerto Rico and the U.S. Virgin Islands (exclusive); many other states run a competitive fund alongside private carriers	Every employer in the monopolistic jurisdictions; anyone in a competitive-fund state who wants the fund as an option	Register directly with the fund — an agent cannot place it in the exclusive jurisdictions	Whether the fund policy carries employer's liability (in the exclusive jurisdictions it does not — see stop-gap above); how out-of-state work is handled
Assigned risk plan	Every competitive-market state, usually administered by NCCI	Employers the voluntary market has declined — commonly high-hazard trades and adverse loss history	Ask your producer to submit you to the plan rather than going without coverage	What the plan's rate is against your last voluntary quote; whether a waiver of subrogation is available on a plan policy and what it costs
Approved self-insurance	Where the jurisdiction authorizes it — not North Dakota as an alternative to WSI, and not the U.S. Virgin Islands at all	Employers with the financial capacity to meet the regulator's test; rarely a small trade business	Apply to the regulator and meet its security, reporting and claims-handling conditions	That you have approval in writing before you rely on it — self-insuring without approval is operating without coverage

The one that matters most to a small trade business is the third. Being declined by the voluntary market is not the end of the road, and it is never a reason to work uninsured.

Do I need workers' comp for one employee?

Sometimes. One employee may trigger the requirement, depending on the state, industry, entity, and worker status — and the only way to answer it for your business is to answer it in your state. Five verified patterns show how differently the same first hire can land:

Example pattern	What the official source shows	What it means for a first hire
First-employee state — California	The law applies with one or more employees.	The requirement question starts the day someone meets the state's employee definition — there is no "too small" grace zone to assume.
Split-threshold state — Florida	The trigger depends on the industry: first employee for construction, higher counts for non-construction and agricultural work.	The same hire that triggers coverage for a construction trade may not trigger the baseline rule for an office business — your operations, not just your headcount, set the answer.
Payroll-threshold state — Kansas	The duty attaches when gross annual payroll exceeds $20,000, whatever the headcount.	Two part-timers can cross the line while a single better-paid employee does not. You have to watch the payroll figure, not the roster.
Date-certain state — Wisconsin	Coverage is required on the day you employ a third person, or by the 10th of the month after a quarter in which you paid $500 or more in combined wages.	The state tells you the exact day. There is no reasonable-time cushion to argue about after an injury.
Election state — Texas	Most private employers may choose whether to carry coverage; those that don't lose their common-law defenses and exclusive-remedy protection.	"Not required" is not the same as "no consequence" — going without transfers the whole exposure to you personally, and a client contract can still require a policy.

Texas is the one true election state on that list, and the choice is narrower than it looks: our guide to Texas workers' comp requirements covers the election itself, what going without actually exposes you to, and when a client contract takes the choice away.

Two facts decide more first-hire cases than the headline threshold does. First, who counts as an employee is the state's call, not yours: paying someone on a 1099, signing an independent-contractor agreement, or hiring through their LLC does not by itself keep them out of the count. Each state applies its own fact-specific test, and it can differ from the federal tax test. If a worker's status is genuinely unclear, treat it as unresolved — ask the state agency or qualified counsel rather than betting payroll on a label. Second, owners are their own category: whether a sole proprietor, LLC member, partner, or corporate officer counts toward the trigger — or can elect in or out — varies by state and entity type, and the answer for your neighbor's corporation may not be the answer for your LLC.

There is a third fact that only bites trades. In several states an officer or owner who elects out of coverage is still counted in when the state decides whether you crossed the threshold. Georgia, North Carolina, New Mexico, Tennessee and Wisconsin all say so on their own pages. Electing out lowers your premium and removes your benefits; it does not shrink your headcount.

If this is your first hire, the requirement question is one item on a longer list — payroll registration, notices, and onboarding come with it. Our first employee checklist covers the broader process; this page owns the workers' comp requirement itself.

Exceptions that can change the baseline row

A baseline trigger is a starting point, not the whole rule. Before you conclude anything from your row, scan this list — if any item touches your business, read the specific rule at the source in your row, because these categories are exactly where compact tables mislead people. Where a category hasn't been verified for your jurisdiction, treat it as unknown, not as inapplicable.

• Construction and public projects. Several states set lower triggers, separate duties, or contract-level requirements for construction work and public contracts. Florida's first-employee construction trigger, Missouri's one-employee rule for employers who erect, demolish, alter or repair improvements, Arkansas's two-employee building-work threshold, New Mexico's Construction Industries Licensing Act rule, Tennessee's construction service provider rule and Nevada's exclusion of construction from the casual-employment exemption are all verified examples. Never assume the general threshold covers construction operations.
• Agriculture and seasonal work. Agricultural employment often has its own counts, seasonal-worker conditions, or partial exemptions — Florida's separate regular and seasonal thresholds and Nebraska's ten-unrelated-worker rule show the pattern.
• Domestic workers and nonprofits. Household employment and nonprofit or volunteer arrangements are frequently carved out or treated under special rules — Connecticut's 26-hour household test and DC's 240-hours-per-quarter domestic trigger are examples. These are jurisdiction-specific fields; don't generalize them.
• Owner and officer elections. Many states let certain owners or officers elect coverage in or out, usually by entity type and often on an official form. An election that exists in one state, for one entity type, proves nothing about another — and in several states the electing owner still counts toward the threshold.
• Subcontractor responsibility. Some jurisdictions hold a hiring contractor responsible for uninsured subcontractors' workers, and some count a subcontractor's employees toward your own threshold. If you use subs, the question isn't only "are they my employees?" — it's also "what does my jurisdiction make me responsible for?" See premium is an estimate until the audit.
• Out-of-state and temporary work. Extraterritorial and reciprocity provisions govern employees who cross state lines, work remotely, or spend part of a project elsewhere. Alaska has no reciprocity with any state. New York and Virginia both require their state to appear on Item 3.A of the policy rather than the all-states 3.C listing. Check each implicated jurisdiction rather than defaulting to your home state.
• Approved self-insurance. Where a jurisdiction authorizes it, approved self-insurance is a regulated alternative to buying a policy — it is different from operating without coverage, and it requires approval, not just a decision. North Dakota does not permit it as an alternative to WSI, and the U.S. Virgin Islands does not permit it at all.

None of these exceptions can be inferred from a jurisdiction's headline trigger, and none of them are optional reading if they describe your work.

Premium is an estimate until the audit

As of 2026-08-07. Audit mechanics are carrier and state specific — confirm yours in writing before you bind.

Here is the part that surprises trades owners more than any threshold. The premium you agree to at binding is an estimate. It is calculated on the payroll you project, sorted into class codes, and adjusted by your experience modification. At the end of the policy term the carrier audits your actual records and issues a bill — or a refund — for the difference. Nobody sends you a warning that the audit is coming; the first many owners hear about it is the invoice.

The single largest driver of an unexpected audit bill in the trades is subcontractors.

If a subcontractor cannot produce their own workers' compensation coverage for the period they worked for you, the auditor will commonly charge what you paid them as your payroll. That is not a penalty and it is not a mistake — it reflects the fact that in most states an uninsured sub's workers can fall back on your policy, so the carrier prices for that exposure. Several jurisdictions put the rule in their own guidance: Florida says an uninsured subcontractor's workers become the contractor's employees; Maine warns that without an approved predetermination your insurer may count the contractor's employees' payroll as yours; Montana says you can be charged premium on an uncertified contractor's wages; Utah treats an unwaived solo operator as a statutory employee; Virginia states plainly that your carrier can charge premium for any subcontractor you hire, including a sole proprietor with no employees; Puerto Rico makes an insured employer subsidiarily liable for an uninsured contractor's workers; and the U.S. Virgin Islands makes a contractor liable to reimburse the Government Insurance Fund for benefits paid to a subcontractor's employees.

A second driver is class code accuracy. The rate attached to a roofing code and the rate attached to a clerical code are not close. If your operations are coded wrong at quote, the audit will re-rate them, and the correction runs both ways. Ask which code the quote assigned to each part of your work and why, before you bind.

What to collect from every sub, and when

Build the file as the job starts, not when the audit letter arrives.

What to collect	When	Why the auditor cares
A certificate showing the sub's own workers' comp policy, with the sub named as the insured	Before they set foot on the job	A certificate naming someone else, or naming only general liability, does not close the exposure
Policy effective and expiration dates covering the whole engagement	Before work starts, and again at renewal if the job runs long	A policy that lapsed mid-job leaves the uncovered weeks chargeable to you
A renewal certificate before the old one expires	Diary it — don't wait for the sub to send it	Gaps are found at audit, not in real time
The state's exemption or waiver document where the state issues one	Before work starts	Kentucky, Tennessee, Utah, Montana, Rhode Island, Maine, Oklahoma, American Samoa and others issue formal exemption or predetermination documents; a verbal claim of exemption is worth nothing at audit
A copy of the signed subcontract showing scope	With the certificate	Establishes what work the sub actually performed
The whole file, retained until after your audit closes	Keep it past the policy term	The auditor reviews the expired term, sometimes months later

Before the audit itself: have payroll records separated by class code, your certificate file for every sub used during the term, records of overtime (many states exclude the premium portion of overtime from the rating basis), and a list of any operations that changed mid-term. If the audit result looks wrong, ask for the worksheet showing which payroll went to which code — you are entitled to see how the number was built.

What going without coverage actually costs

The consequences of operating uninsured where coverage is required are set by each jurisdiction, and they are not limited to a fine. Across the jurisdictions verified above, four categories recur:

• You lose exclusive remedy. This is the big one. Workers' comp is a trade: the worker gives up the right to sue you, and you accept no-fault liability. Go without the coverage and you lose your side of the bargain. Illinois and Iowa both say an injured worker may then sue in civil court where benefits are unlimited; in Illinois, the burden shifts to you to prove you were not negligent.
• You pay the claim personally. Colorado, Idaho, Rhode Island, Nebraska and others make an uninsured employer directly responsible for the medical care and wage benefits. North Dakota can pursue the actual cost and reserves of the claim, Puerto Rico's Fund seeks reimbursement of compensation plus medical expenses, and the U.S. Virgin Islands adds a penalty equal to 30% of what the Fund paid.
• You can be stopped from working. Stop-work orders and cease-operations authority exist in Massachusetts, Connecticut, Colorado, Illinois, Idaho, Rhode Island, Oklahoma and elsewhere. In the Northern Mariana Islands, the business license itself is gated on a clearance certificate from the Commission. On a jobsite, that means the crew goes home the same day.
• It can be criminal. California treats failure to secure coverage as a criminal offence; Idaho makes it a misdemeanour; Illinois grades a knowing failure as a felony. Several states also hold corporate officers personally liable for the penalty.

The two election states are a special case. Texas and South Dakota do not mandate coverage for most private employers — but "not required" is not "no exposure." A Texas nonsubscriber forfeits contributory negligence, assumption of risk and fellow-employee negligence as defenses and loses exclusive remedy, so an injured worker sues directly for full tort damages with your best defenses removed. South Dakota's arrangement carries a double-compensation exposure. If you are considering going without in either state, that is a decision to make with counsel and your own risk numbers in front of you — not from a table.

How to confirm the rule and take the next step

The safe path from "I looked at the table" to "I've handled this correctly" is short, and it runs through the governing authority — not through this page, a forum answer, or a sales call. Work it in order:

1. Gather your facts. For each person who works for you: the jurisdiction where they perform services, what they do, and how they're engaged. For the business: entity type, owners and officers and their roles, industry and operations, any multi-state or public-project work, and any contract that mentions insurance.
2. Open your jurisdiction's official source from the matrix row and read the rule against those facts — the employee definition, the trigger, owner and officer treatment, and any industry or project provisions that touch your work.
3. Document what you found: the source page, the date you read it, and how each fact maps to the rule. If your situation changes — a new hire, a new state, a new contract — the answer can change with it.
4. Escalate what's unclear. Ask the state workers' compensation agency about thresholds, employee definitions and exemption elections. Ask a licensed insurance producer in your state about placement, class codes and what a quote actually includes. Ask a construction attorney about contract terms, indemnity clauses and anything a general contractor's insurance exhibit demands — and note that many states limit by statute how broadly a contractor can be required to indemnify a general contractor. These anti-indemnity statutes vary in scope, and a clause that is enforceable in one state may be void in another, which is why the exhibit goes to an attorney licensed where the work is, not to your agent. Several states apply the same logic to waivers of subrogation: Kansas, for example, limits how far a construction contract may require one. If something has already happened, call the carrier's claims line first and report it. Do not resolve a legal ambiguity by picking the cheaper reading.
5. Then act on the answer. If coverage is required — or a contract requires it, or the risk justifies it voluntarily — obtain a legitimate policy through an authorized market, or pursue approved self-insurance where your jurisdiction allows it. If a client asks for proof, understand first what a certificate is and isn't: our certificate of insurance explainer covers proof requests, and no certificate exists legitimately before a valid policy does.

Two boundaries to keep straight while you act. A contract may require coverage even when the baseline rule does not — read what the contract actually demands, because it can be stricter than the law and it binds you by agreement, not by statute. And nothing on this page determines legal sufficiency for your business: it tells you where the answer lives and how to verify it. Once you've confirmed a workers' comp requirement or a voluntary need, the workers' comp insurance hub covers the coverage category, cost drivers, and current quote options.

After you're covered: what maintenance looks like

Binding the policy is the middle of the job, not the end. The work that keeps a policy honest is administrative and it is entirely within your control.

• Certificates out. Every client, GC, landlord and licensing body that asked for proof needs a current certificate, and every one of them needs a fresh one at renewal. Diary the renewal date rather than waiting for someone to notice the old certificate expired.
• Certificates in. Run the sub-collection file in the previous section as a standing process, not a project task.
• Payroll and class codes. When operations change — you add a service line, start working at height, buy a truck — tell your agent during the term. A mid-term change discovered at audit is more expensive than one reported when it happens.
• New states. The day a crew crosses a state line, the other jurisdiction's rule is in play. Adding one is normally an endorsement to the policy: ask your agent to add the state to Item 3.A rather than relying on the all-states 3.C listing, confirm the effective date is on or before the first day of work there, and expect the payroll to be re-rated at that state's rates.
• Audit prep. Assemble the records described above before the auditor asks.
• Injury reporting. Every jurisdiction sets a reporting window for the employer — commonly a handful of days. Missing it can carry its own penalty on top of the claim.

When the answer is bad news

• No market will write your trade. Every competitive-market state has an assigned risk plan, usually administered by NCCI, for employers the voluntary market declines. Ask your agent to place you there rather than going bare.
• The required limits are more than you can afford. Contract limits are negotiable in a way statutes are not. That is a conversation for a construction attorney before you sign, not after.
• Your loss history has changed the price. Your experience modification is built from past claims. Ask for the worksheet, check it for errors, and ask what a return-to-work program would do to it.
• You are operating uninsured right now. Stop and read what going without coverage actually costs. Then call a licensed producer in your state today. Buying coverage now does not fix a past injury — coverage is not retroactive, and no legitimate policy or certificate can be backdated to cover a loss that already happened. If someone has already been hurt, that is a call to counsel.
• You were non-renewed mid-project. Notice rules and their timing are set by state law and by your policy. Talk to your agent about the assigned risk route immediately, and tell the general contractor before they find out from a compliance sweep.

Terms you'll meet in a contract

These are the words that appear in a general contractor's insurance exhibit and on your own policy. You will be asked to produce some of them.

Term	What it actually means
Employer's liability (Part 2)	The part of a workers' comp policy that responds when an injured worker sues you in negligence. Included in competitive-market states; absent from monopolistic state fund policies. How to read its three limits.
Stop-gap coverage	An endorsement on your general liability policy that supplies employer's liability in Ohio, North Dakota, Washington and Wyoming. Not automatic — ask for it by name.
Exclusive remedy	The bargain at the heart of workers' comp: guaranteed no-fault benefits for the worker, protection from suit for the insured employer. You lose it if you were required to insure and did not.
Class code	The classification assigned to each part of your operations, which sets the rate applied to that payroll. Accuracy here moves your premium more than almost anything else.
Experience modification	A factor built from your past claims that multiplies your premium up or down against the average for your class.
Premium audit	The end-of-term reconciliation of estimated payroll against actual payroll and codes. Produces a bill or a refund.
Certificate holder	The party a certificate is issued to as evidence. Being a certificate holder confers no rights under the policy.
Additional insured	A party added to a policy by endorsement, which does confer rights. On workers' comp specifically, additional insured status is generally not available — a GC asking for it usually means it on your general liability.
Waiver of subrogation	An endorsement giving up your carrier's right to recover from another party. This is the endorsement GCs typically want on a workers' comp policy. Usually carries a premium charge, and it is not available in every state.
Primary and non-contributory	Contract wording requiring your policy to respond first and without seeking contribution from the other party's insurance.
Surety bond	Not insurance, and not a substitute for it. A three-party guarantee to a licensing body or a customer that you will perform the work or pay what you owe. If the surety pays a claim, it comes after you for the money — the bond protects them, not you. See license and permit bonds.
Information page (Items 3.A to 3.D)	The declarations page of a workers' comp policy. Item 3.A lists the states the policy actually covers; Item 3.B carries the three employer's liability limits; Item 3.C is "other states insurance," a conditional listing that some states will not accept as proof; Item 3.D lists the endorsements attached. When a state or a GC asks which item your state appears on, this is the page they mean.
Assigned risk plan	The market of last resort for employers the voluntary market declines. Available in competitive-market states, usually administered by NCCI.
Approved self-insurance	A regulated alternative to buying a policy, requiring approval and proof of financial capacity. Not the same as going without coverage, and not available in every jurisdiction.

Our certificate of insurance explainer covers how these get requested and issued in practice.

Choosing a provider at a glance

This page doesn't rank insurers, and the requirement decision comes before any shopping decision. But once your jurisdiction's rule and your facts point to coverage, you can shortlist intelligently by matching your situation to the kind of option worth quoting — the named comparisons live on the workers' comp insurance hub. Every pick below is an option to quote, never a promise of eligibility, price, or coverage.

• Best for a confirmed requirement with W-2 payroll in one state: an option authorized for workers' comp in that state that publishes how it classifies your operations and how its payroll audits work.
• Best where your row establishes a state fund or assigned-risk route: whatever route your row itself names — start there rather than with an ad. In Ohio, North Dakota, Washington, Puerto Rico and the U.S. Virgin Islands that is the fund, full stop.
• Best for construction trades or public-project work: an option that documents, in writing, how it handles project requirements and subcontractor certificates for your trade.
• Best for crews that cross state lines: an option that will document coverage for each state where your people actually work — confirmed against each implicated jurisdiction's official rule, not assumed.
• Confirm the requirement first if your row carries an open flag, owners are your only workers, or a classification question is open: verification comes before any quote.

Your situation	Shortlist move	Confirm in every quote
Newly licensed sole operator, no employees, but a client contract mentions workers' comp	Read the contract's exact insurance clause, confirm your owner rules in your row, then compare voluntary or contract-driven options through the hub	Whether an owner can be covered under the policy; what payroll basis applies to you; whether your jurisdiction issues an exemption or waiver document the client would accept instead
Sole operator hiring a first W-2 employee in a first-employee state	Gather the fact checklist above and quote options authorized in your state	The class codes assigned to your operations; the payroll estimate and audit terms; the exact date coverage takes effect relative to the hire's start date
Sub working for general contractors — roofing, framing, electrical, mechanical	Confirm the requirement first, then quote options that will issue what the GC's exhibit actually demands	Whether a waiver of subrogation is available in your state and what it costs; the three employer's liability limits against the exhibit's numbers; how fast a certificate is issued after binding
Residential remodeler working directly for homeowners	Confirm whether your state treats your work as construction, then quote — there is no GC exhibit to check your homework	Which class codes cover a mixed remodel scope; how the carrier treats helpers paid by the day; whether a homeowner can be added as a certificate holder
Operator using 1099 subs regularly — cleaning, landscaping, handyman	Build the sub-certificate file before you quote, because the answer changes your price	How the carrier treats an uncertified sub at audit; whether your jurisdiction counts subs' employees toward your own threshold; which state exemption or waiver documents the carrier will accept
Trade with elevated hazard classification — roofing, tree work, work at height	Confirm the requirement, then expect the assigned risk plan to be part of the conversation	Which height, hot-work or excavation exclusions sit on the quote; what the experience modification is doing to the price; whether the voluntary market declined you and why
Crew working across state lines, or adding a state mid-term	Confirm each implicated jurisdiction's rule before quoting	Which states the policy documents coverage for and on which item of the information page; how temporary out-of-state work is handled; what happens when a new state is added mid-term; whether stop-gap is needed
Contractor bidding public or prevailing-wage work	Read the project's insurance requirements first — they can exceed the statute and the statute does not override them	Which limits and endorsements the bid documents require; whether the carrier will issue them and how fast; whether the project requires a specific certificate holder or additional insured wording on the general liability
Contractor facing an audit bill, a claim, or a non-renewal	Ask for the audit worksheet or the mod worksheet before you shop; a disputed figure follows you to the next carrier	Which payroll went to which code and why; whether an uncertified sub drove the bill; what the assigned risk plan would cost if the voluntary market declines you

Score every quote against the same card: the fact list in how to confirm the rule is the scorecard. Ask each option the same questions, record the same fields, and compare documented answers — not marketing pages — so no option wins on the strength of an unasked question.

Frequently asked questions

Does a 1099 worker count as an employee for workers' comp?

Sometimes. The tax form is federal tax context, not the state workers' comp test — states apply their own fact-specific definitions of employment, and a person you pay on a 1099 can still count. Louisiana explicitly reaches subcontractors doing substantial manual labor; Washington tells employers that workers "whether they are employees or independent contractors" may require coverage. If a worker's status is unclear, treat it as an open question for the state agency or qualified counsel. If you genuinely operate independently yourself, see independent contractor insurance — but don't use that page to settle a disputed classification.

Which state's rule applies to a remote employee?

Start with the state where the person actually performs the work, then check whether your own state's rule also reaches the arrangement — extraterritorial and reciprocity provisions mean more than one state can be implicated. Alaska has no reciprocity agreements at all. Verify each state involved rather than defaulting to your headquarters state, and ask the agencies directly when the answer isn't explicit.

Do owners and officers count toward the employee threshold?

It depends on the state and your entity type, and the two halves of that question have different answers. Sole proprietors, partners, LLC members and corporate officers are distinct categories, and states variously include them, exclude them, or let them elect in or out — often on an official form. Separately, several states count an officer who has elected out of coverage when deciding whether you crossed the threshold. Never assume owners are automatically exempt or automatically counted; check the entity-specific rule in your row.

Can a client require workers' comp when state law doesn't?

Yes. A contract may require coverage even when the baseline rule does not, and the contract binds you by agreement. New Hampshire's Department of Labor says so directly: a general contractor may require a sole-proprietor subcontractor with no employees to carry coverage. Read the exact clause: required coverage, limits, and any proof, endorsement or certificate-holder terms. Contract proof requests are a separate workflow from the legal requirement — our certificate of insurance explainer covers what a certificate can and can't do.

Can I buy a policy just to satisfy a certificate request?

Not as a substitute for covering the people who work for you. Some states allow an owner-only or minimum-premium policy that covers the named owner and no employees, and a general contractor will sometimes accept one from a genuine solo operator. But it is not a workaround: the moment you have someone who meets your state's employee definition, that person has to be on a policy, and a policy written on the premise that you have no employees will not quietly cover them. A GC that reads the payroll basis on the declarations may reject it, and an auditor who finds employees you did not report will re-rate the term — see premium is an estimate until the audit. If you are a genuine solo operator, ask a licensed producer in your state what an owner-only policy actually covers, and ask your state agency whether it issues an exemption or waiver document the client would accept instead.

Why did I get a workers' comp audit bill?

Because the premium you paid was an estimate. At the end of the term the carrier compares your actual payroll and class codes against the projection. The two most common causes of a large bill in the trades are payments to subcontractors who could not produce their own coverage — which auditors commonly charge as your payroll — and operations rated under the wrong class code. See premium is an estimate until the audit for what to collect and when, and ask your carrier for the worksheet showing which payroll went to which code.

My general contractor wants to be an additional insured on my workers' comp. What do I do?

Ask them to be specific, because that request is usually mislabeled. Additional insured status is a general liability concept and is generally not available on a workers' compensation policy. What a GC normally needs from your workers' comp is a waiver of subrogation — NCCI form WC 00 03 13, which applies only where a written contract requires it and only in favor of the party named in its schedule, and which is not available at all in Kentucky, New Hampshire and New Jersey. Additional insured, primary and non-contributory wording, and the required limits will attach to your general liability instead. Send the exhibit to your agent and ask which endorsement satisfies which line, and what each costs. If the indemnity clause is broader than the insurance backing it, that is a question for a construction attorney before you sign.

How fast can I get a certificate of insurance after buying workers' comp?

It's conditional. A certificate is commonly issued same-day to within a few business days after a policy binds — and the clock is set by the slowest dependency: complete quote inputs, underwriting review, payment or deposit, endorsement processing for waiver-of-subrogation or other requested wording, and the certificate-holder details from the requesting party. A certificate is evidence of a bound policy, never a substitute for one — there is no legitimate proof without valid coverage.

How much does workers' comp cost for a small trade business?

Your price is set by your state, your operations and their class codes, payroll, limits and deductible, your experience modification, and your claims history — and it is reconciled at audit against what you actually paid out. That is why a national average tells you nothing useful: the same payroll rated as clerical and rated as roofing produce prices that are not in the same range. The workers' comp insurance hub is where cost drivers and any dated premium samples for this coverage live, with the business profiles and assumptions behind them.

Verify before payroll or proof

Don't act on a summary — including this one. Open your row, click through to the official source, and confirm the rule against your actual facts: who works for you, where, in what industry, and under what entity. If coverage is required — or a contract or your own risk picture calls for it — take the legitimate path: a valid policy through an authorized market, or approved self-insurance where your jurisdiction allows it, starting from the workers' comp insurance hub. The governing authority controls; make it the last thing you check before payroll starts and the first thing you check when anything changes.

Sources and last verified date

Last verified: August 7, 2026

Next review: November 5, 2026

• Employer FAQs — California Division of Workers' Compensation — California's one-employee trigger, in the agency's own words.
• Coverage requirements — Florida Division of Workers' Compensation — Florida's split construction/non-construction/agricultural thresholds.
• Employer resources — Texas Department of Insurance, DWC — Texas's elective rule for most private employers.
• Coverage requirements — New York Workers' Compensation Board — New York's near-universal coverage duty.
• Getting coverage — Ohio Bureau of Workers' Compensation — Ohio's exclusive state fund.
• Coverage requirements — North Dakota Workforce Safety & Insurance — North Dakota's exclusive fund rule.
• Do I need a workers' comp account? — Washington L&I — Washington's exclusive fund rule.
• Employer information — Wyoming Department of Workforce Services — Wyoming's classification-based fund requirement.
• Workers' disability compensation insurance requirements — Michigan LEO — Michigan's threshold and hours tests.
• Who needs workers' compensation coverage — Minnesota DLI — Minnesota's coverage rule and exemptions.
• Employer requirements — New Jersey Department of Labor — New Jersey's coverage duty for employers.
• Workers compensation overview — Kansas Department of Labor — Kansas's payroll-based threshold.
• Which employers must provide benefits — Tennessee DOL — Tennessee's five-employee rule with the construction exception.
• Basic Manual Rule 5, Policy and Endorsements — North Carolina Rate Bureau — the endorsement mechanics (including waivers) referenced in the FAQ.
• Workers' compensation overview — U.S. Virgin Islands Department of Labor — a territory system included in the table.