{"id":5122,"date":"2016-04-04T10:47:57","date_gmt":"2016-04-04T15:47:57","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/smallbusiness\/liability-and-insurance\/workers-compensation.html"},"modified":"2026-09-21T16:38:11","modified_gmt":"2026-09-21T21:38:11","slug":"workers-compensation","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/workers-compensation.html","title":{"rendered":"Do I Need Workers’ Compensation Insurance? A Guide for Small Business Owners"},"content":{"rendered":"\n
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Do I Need Workers' Compensation Insurance? A Guide for Small Business Owners<\/h1>\n\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Workers’ compensation insurance<\/span> is required for nearly every business with one or more employees in all states except Texas. Failure to carry required coverage can lead to severe penalties, including steep daily fines, stop-work orders, and even criminal charges. This no-fault insurance protects your business from costly lawsuits while ensuring your employees get necessary medical care<\/span> for work-related injuries<\/span>. Even if not required (e.g., for a sole proprietor<\/span>), having coverage can be a wise business decision to protect against personal liability for a workplace accident<\/span>.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

For most small business<\/span> owners, having workers\u2019 comp coverage is a necessity. In nearly every state<\/a>, you must carry workers’ compensation insurance<\/span> if you have one or more employees. This applies whether your employees are full-time, part-time, or temporary.<\/p>\n

While this general rule is a safe guide, the exact requirements can vary. Some states set the threshold at a different number of employees or have specific rules for certain industries. Because laws are state-specific, check the requirements in the states where your business operates.<\/p>\n

For a detailed breakdown, see our guide to <\/strong>Workers’ Compensation Laws<\/span> by State<\/u><\/strong><\/a>.<\/strong><\/p>\n

Workers\u2019 Compensation: What\u2019s Covered<\/h2>\n

Workers\u2019 compensation insurance<\/span> is a \u201cno-fault\u201d insurance coverage that protects both you and your workers. It provides your employees with immediate care for work-related illness<\/span> or injury and protects you from expensive lawsuits when employees are hurt on the job. Knowing they can get medical care<\/span> and return to work keeps employees from hiding minor injuries until they become expensive, disabling conditions. It protects your personal and business assets from costly litigation and company-ending bankruptcies.<\/p>\n

Workers\u2019 compensation typically includes:<\/p>\n