Do I need workers' comp if I have no employees?
Often not for yourself, but it depends on your state, trade, and business setup. Utah and Wisconsin leave a sole proprietor outside workers' comp unless they elect in; New Mexico covers them unless they opt out. Construction has the most exceptions: Utah presumes a licensed construction LLC employs its owners, and Florida and California require many owner-only contractors to carry it. A general contractor can still require a certificate.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
Does a sole proprietor need workers' comp?
It depends on the state and the trade. In Utah, Wisconsin, and Georgia a sole proprietor is outside the policy unless they elect in (Utah Code 34A-2-104; Wisconsin's Department of Workforce Development; NCCI's Georgia filing instructions). New Mexico is the reverse: NCCI's instructions say sole proprietors are covered unless they file to be excluded.
- Florida Statutes 440.02: construction sole proprietors and partners are employees. Only corporate officers, including LLC members owning 10% or more, can file an exemption, up to three per corporation.
- California's Contractors State License Board: C-8, C-20, C-22, C-39 roofing, and C-61/D-49 tree service licensees must carry it with or without employees.
- Oregon (NCCI instructions): sole proprietors licensed by the Construction Contractors or Landscape Contractors Board are automatically covered.
Does a single-member LLC need workers' comp?
Utah's Labor Commission treats LLC members like partners, outside the policy unless they elect in, except in construction: under Utah Code 34A-2-103(8), an LLC or other unincorporated business required to be licensed under the Utah Construction Trades Licensing Act is presumed to employ each owner and must cover them, unless it proves by clear and convincing evidence that the owner is an active manager, holds at least 8%, or is not subject to supervision or control.
Corporations follow separate rules. Wisconsin covers officers unless a closely held corporation with no more than two officers and no other employees files the Corporate Officer Option Notice. A Utah corporation that does not contract its work and has no employees other than directors or officers can exclude up to five of them.
Why does my general contractor want a certificate when I have no employees?
Because of its own audit. Money a contractor pays an uninsured sub can be counted as its payroll unless it shows the sub is a sole proprietorship with no employees; Michigan's workers' compensation agency lists a federal ID number or the written contract as accepted proof. Wisconsin's Department of Workforce Development calls avoiding that audit dispute the principal reason contractors ask for proof, usually a certificate.
North Carolina Rate Bureau Rule 2-H requires a contractor to show its carrier that each sub had workers' comp in force and charges premium for each sub without it. Utah Code 34A-2-103(7) makes the hiring contractor the employer of an uninsured sub's workers unless it relies on the sub's certificate or Utah coverage waiver. And a contract can require a policy where the law does not.
Can I send an exemption instead of a certificate of insurance?
It depends on the state and on who is asking. Utah's Workers' Compensation Coverage Waiver ($50, one-year term, from the Labor Commission) is named in Utah Code 34A-2-103 as a document a hiring contractor may rely on. New York's CE-200 exemption is not: the Workers' Compensation Board says it cannot show another business or its carrier that coverage is not required. In Wisconsin a signed waiver has no effect under s. 102.16(5).
Otherwise the answer is a policy. The low-cost version covers any employees but excludes you; Wisconsin calls it a minimum-minimum premium policy, and the market calls it a ghost policy. Ask the contractor in writing which document their carrier accepts before you buy.
What changes when I hire someone?
An exemption covers you, not your workers, and each state sets its own employee threshold. Utah's Labor Commission can revoke a waiver once the business becomes ineligible, and California's license board voids an exemption once you employ anyone and wants proof of coverage within 90 days.
A helper paid on a 1099 counts too if they fail your state's independent contractor test.
Exemption, ghost policy, or full policy: what each one proves
Three documents can answer a certificate request; the person asking decides which counts.
| What you send | What it proves | Who usually accepts it |
|---|---|---|
| State exemption or waiver | You are not covering yourself; it says nothing about your workers. | The issuing agency or board; a contractor only where state law lets it rely on one, as Utah's does. |
| Minimum-premium (ghost) policy | A policy is in force for any employees. You are excluded. | A contractor or carrier that asks for a certificate of insurance. |
| Policy that includes you | You and any employees are covered for work injuries. | Everyone, including license boards that require it with no employees. A Utah construction LLC owes it to its owners unless it rebuts the 34A-2-103(8) presumption. |
Requirements depend on the business, the worker setup, and the current instructions of the state agency and the contractor's carrier.
Where these answers come from
Statutes, state agencies, and rating bureaus. Requirements depend on the business, the worker setup, and the current instructions of the state agency, so check the source for your state before acting.
The next question
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
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
No employees FAQ
Do I need workers' comp as a single-member LLC with no employees?+
Often not for yourself, depending on the state. Utah treats LLC members like partners, outside the policy unless they elect in. Utah construction licensees are the exception: a licensed construction LLC is presumed to employ its owners unless it rebuts that presumption. In Florida construction, a member must own 10% or more and file an exemption.
Can I sign a waiver for the general contractor instead?+
A waiver you write yourself does not change the law. Utah's Labor Commission waiver can satisfy a Utah contractor; Wisconsin gives a signed waiver no effect.
Does a ghost policy cover me if I get hurt?+
No. A minimum-premium policy covers employees you might have and excludes you. In states that allow it, you elect coverage and the policy is endorsed to name you.
Asked for a certificate you don't think you need?
Text Redoubt your state, how the business is set up, and what the contractor's insurance requirements say. We will tell you whether an exemption filing, a minimum-premium policy, or a policy that covers you fits the request.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.