Does Maryland require workers’ compensation insurance?
Yes. Maryland requires workers' compensation from the first employee: under Labor and Employment Article 9-202, anyone working for an employer under a contract of hire is presumed to be a covered employee, with no minimum head count. Sole proprietors and partners are not covered unless they elect in. Most corporate officers, and LLC members owning at least 20%, can elect out by written notice. An uninsured employer faces a Commission penalty of up to $25,000.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before Maryland requires workers' comp?
Maryland has no minimum head count. Labor and Employment 9-202 presumes that anyone, a minor included, working for an employer under an express or implied contract of hire is a covered employee, and puts the burden on the employer to prove the worker is an independent contractor under the common law or falls under a specific exemption. One covered employee is enough to require coverage under 9-402.
The statute carves out a few groups: casual employees (9-205); domestic workers in a private home who earn less than $1,000 in cash from that household in a calendar quarter (9-209); and farm workers, who are covered only when the farmer has at least three full-time employees or a full-time payroll of at least $15,000 a year (9-210). Whether one of these fits depends on the facts.
Source: Md. Code, Labor and Employment 9-202, checked .
Which owners, officers, and family members are exempt in Maryland?
A sole proprietor or partner is not a covered employee unless they elect in, which requires working full time in the business and written notice to the Commission and the insurer (9-227, 9-219). Paid corporate officers and LLC members are covered employees under 9-206, but some can elect to be exempt: officers of a close corporation, up to five officers of any other corporation, officers owning at least 20% of a farm or professional corporation, and LLC members owning at least 20% of the profits interest.
Paying someone on a 1099 does not settle their status. Under 9-202 the business has to show the worker is an independent contractor under the common-law test; if it cannot, the worker is a covered employee and their pay belongs on the policy.
Source: Md. Code, Labor and Employment 9-206, checked .
What happens to a Maryland employer with no workers' comp?
Since July 1, 2024, when the Commission finds after a show-cause hearing that an employer has not insured all its covered employees, Labor and Employment 9-407 has it order the employer to buy a policy, file proof, and pay a penalty of up to $25,000 to the Uninsured Employers' Fund. Ignoring that order for 30 days can bring a second penalty of up to $25,000. An unpaid penalty is a lien on the business's assets, and a managing officer or LLC member who knowingly went uninsured can be personally liable for it.
Other consequences stack on top. Going uninsured is also a misdemeanor, up to $5,000 and a year in jail, charged to a corporation's managing officer (9-1107). An injured worker can sue for damages, and the employer loses its usual defenses (9-509). A claim decided against an uninsured employer adds an assessment of $500 to $1,000 plus 15% of the award, up to $5,000 (9-1005).
Source: Md. Code, Labor and Employment 9-407, checked .
Who enforces workers' comp in Maryland?
The Maryland Workers' Compensation Commission enforces the requirement. Its Insurance, Compliance and Reporting Division handles employer compliance, Certificates of Compliance, and exclusion forms, and the Commission holds the show-cause hearings under 9-407. The Maryland Insurance Administration licenses carriers, and the Uninsured Employers' Fund pays claims against uninsured employers.
Source: Maryland WCC, Insurance, Compliance and Reporting, checked .
Where do Maryland employers buy coverage?
Maryland is not a monopolistic state. Employers buy from any insurer licensed to write workers' comp in Maryland, or self-insure with the Commission's approval. Chesapeake Employers' Insurance Company, the former Injured Workers' Insurance Fund, became a private nonprofit insurer in 2013 that competes with private carriers, and Insurance Article 24-306 makes it the insurer of last resort: it can refuse a policy only for reasons such as unpaid premium or a failed payroll audit.
Source: Md. Code, Insurance 24-306, checked .
Who sets the class codes and rates in Maryland?
Maryland is an NCCI state. NCCI files Maryland's advisory loss costs and publishes a yearly Maryland State Advisory Report on that filing, and class codes and experience mods follow NCCI's rules. Each carrier's own rates and rules are filed with the Maryland Insurance Administration, which the Commission names as the place for rate filings and premium questions.
Source: NCCI, State Advisory Resources: Maryland, checked .
Is there an exemption or waiver form in Maryland?
Not a waiver. An owner with no employees has nothing to waive, since sole proprietors and partners are outside coverage by default. Two filings exist. An officer or LLC member electing out is named on the Commission's Exclusion Form in its CompHub portal, with notice to the insurer. And a business applying for a state or local license or permit must show a policy number or a Certificate of Compliance from the Commission (9-105), applied for through CompHub.
The Commission's employer FAQ says neither an employer nor an employee can waive the workers' compensation law. The day the business hires its first covered employee, a policy is due.
Source: Maryland WCC, Frequently Asked Questions, checked .
Sorting out Maryland workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the Maryland requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
- Alabama
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The hub, and the Maryland pages that go deeper
Maryland workers’ comp FAQ
Do I need workers' comp in Maryland with only one employee?+
Yes. Labor and Employment 9-202 presumes anyone working for you under a contract of hire is a covered employee, and 9-402 requires coverage for each one. Only narrow groups, such as casual employees and some domestic and farm workers, fall outside it.
Does a Maryland sole proprietor need workers' comp for themselves?+
No. Under 9-227 a sole proprietor is not a covered employee unless they elect in, which requires working full time in the business and sending written notice to the Commission and the insurer. Any employees the owner hires still need coverage.
Can a Maryland LLC member opt out of workers' comp?+
A paid LLC member is a covered employee under 9-206, but a member who owns at least 20% of the profits interest can elect to be exempt. The company names that member in written notice to the Commission, using the Exclusion Form on CompHub, and to its insurer.
Do I have to buy from Chesapeake Employers' Insurance Company?+
No. Maryland employers can buy from any licensed carrier. Chesapeake Employers is the insurer of last resort under Insurance Article 24-306, so it matters most when private carriers decline a business.