Most states require businesses to provide workers’ compensation insurance if they employ one or more people, including themselves and family members. Typical workers’ compensation insurance covers medical care and lost wages for employees who are injured while on the job. It is best, however, to consult with your local independent insurance agent in these matters, rather than trying to interpret these laws yourself. Your local agent is familiar with your state laws regarding whether or not this insurance is mandated, and is also well-versed in the specific criteria that has to be met in order for workers’ compensation insurance to apply, as in the case with the state of Maryland.

There are a few exceptions to mandated workers’ compensation insurance, however, and these vary by state. For instance, in Pennsylvania, a sole proprietor with no employees is not required to purchase workers’ compensation insurance. As a result, independent contractors in Pennsylvania might be excluded from this regulation, as long as they qualify as an independent contractor. This designation becomes particularly important if another Pennsylvania-domiciled business subcontracts with an independent contractor. Be certain to review subcontractor workers’ compensation requirements with your local independent insurance agent to ensure that your business is covered in the event the subcontractor is injured on the job. There is specific statutory criteria that determines if someone is an employee or independent contractor. Working out these details before a claim occurs is of paramount importance to protect your business from an uncovered liability.

Your local independent insurance agent is the best person to advise you on how best to protect your business.