In almost every U.S. state, employers are required to carry workers’ compensation insurance if they have a certain number of employees. If you’re a business owner in Maryland, you must carry workers’ comp insurance if you have at least one employee. In some situations, employers in Maryland might be exempt from compulsory coverage.

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 Maryland work?


The state of Maryland requires you to carry workers’ compensation insurance as soon as you have one full-time or part-time employee. Most employers obtain coverage by purchasing it from a private insurer. If you can’t find a suitable private insurance provider, you can secure coverage through Maryland’s state fund, the Chesapeake Employers’ Insurance Company.

If your company meets all the state’s requirements, it could be eligible to become a self-insurer. Companies that self insure must demonstrate their ability to handle claims without relying on an insurer. The self-insurance application form can be accessed here.


Who needs workers’ compensation insurance in Maryland?


Nearly every employee in Maryland must be covered by workers’ compensation insurance, whether they are part-time or full-time workers.

However, agricultural employers aren’t legally required to obtain coverage if they have two or less employees and an annual payroll of $15,000 or less.

Sole proprietors, partners in partnerships, and independent contractors are also not required to purchase coverage.

If you are a business owner or sole proprietor, 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 Maryland?


In Maryland, any business that fails to provide workers’ compensation when legally required to do so can be subject to a fine of up to $10,000. If a corporation is found to be non-compliant, its officers can be held personally liable for the fine. Terminating workers who file claims or failing to secure compensation payments can also lead to fines of up to $5,000 and up to a year imprisonment.


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 might 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.