In almost every U.S. state, employers are required by law to carry workers’ compensation insurance if they have a certain number of employees. If you’re a business owner in Maine, you must carry workers’ comp insurance if you have at least one employee. Like most states, Maine specifies a few employee types that are exempt from compulsory coverage.

Workers’ compensation is one of many small business insurance types all Maine entrepreneurs should consider.

In this article, we’ll go over who you need to cover, who is exempt, and possible penalties for non-compliance.


How does workers’ compensation insurance in Maine work?


The state of Maine requires you to carry workers’ compensation insurance as soon as you have one employee. Employers can obtain coverage by purchasing a policy via the private market. Some employers can have difficulty finding a private insurance provider, either due to being a brand new business, having a high-risk business or having a history of workplace incidents. Those businesses can find coverage through the state fund, the Maine Employers’ Mutual Insurance Company, or MEMIC.


Who needs workers’ compensation insurance in Maine?


Nearly every employee in Maine must be covered by workers’ compensation insurance, with some exceptions. Employers who could be exempt from carrying workers’ comp insurance include:

  • Agricultural employers with seasonal or casual laborers who carry at least $25,000 in employers’ liability insurance coverage and $5,000 in medical payments coverage
  • Employers with six or fewer agricultural laborers who carry at least $100,000 in employers’ liability insurance coverage per employee and $5,000 in medical payments coverage
  • Employers of domestic workers in private homes
  • Sole proprietors with no employees
  • Independent contractors or subcontractors (provided they have proof of coverage elsewhere.)

As a business owner or sole proprietor, you don’t have to purchase workers’ compensation insurance for yourself. That doesn’t mean you shouldn’t get coverage. Sustaining an injury or illness while performing your work can lead to sizable hospital bills, medical costs and a lengthy recovery period. Investing in workers’ comp for yourself could save you from a brutal financial setback.


What are the penalties for not having workers’ comp in Maine?


Not providing workers’ compensation coverage in Maine when you’re required to do so leads to some serious consequences. If you’re found to have a lapse of coverage, you could be fined $10,000 or 108% of the premiums you would have had to pay if you had the proper coverage. Failure to pay compensation could also lead to a $200 fine per day of non-compliance.

On top of that, if you do have a workplace accident and an employee needs medical attention while you don’t have coverage, you could be liable for all of that employee’s medical costs and lost wages.


What does workers’ comp cover?

Medical costs

If one of your employees is injured or becomes ill on the job, workers’ comp can cover their immediate medical expenses such as ambulance rides, emergency room visits, x-rays, surgery and prescription medications.

For example, if a kitchen employee reaches into a sink and slices their hand on a broken glass, they might require medical attention. Workers’ comp could cover the costs of their emergency room visit, stitches and pain management prescriptions.

Lost Wages

Many work-related incidents can leave employees unable to work for several weeks or months. Workers’ comp can provide some relief for employees in the form of partial wage replacement.

If an employee breaks their foot in a work-related accident, they could end up stuck at home for multiple months. While they’re out of work, workers’ comp would cover some of their lost wages.

Ongoing Care

Some work-related injuries require long-term care such as physical therapy or pain management. Often, these injuries are more the result of repetitive workplace stress rather than a single traumatic incident. Chronic back issues for construction workers and carpal tunnel syndrome for office employees are two common examples of the types of workers who must receive ongoing care due to repetitive stress. If their claim is approved, workers’ comp can cover the costs associated with their ongoing care.

Death Benefits

If the unthinkable happens and an employee passes away because of a workplace incident, workers’ comp can cover funeral costs and other death benefits for the deceased worker’s family or beneficiaries.