Workers comp coverage required in Delaware
All employers with one or more employees must carry workers' compensation insurance. Verified 2026-05-09.
Who must carry workers comp in Delaware?
Delaware workers compensation coverage is required All employers with one or more employees must carry workers' compensation insurance.
The threshold language matters: states write the rule slightly differently. Some count any worker, some count only W-2 employees, some count owners separately, some have industry-specific exemptions (agriculture, domestic service, casual labor). For a Delaware employer with a non-trivial workforce, the safest default is: assume coverage is required and confirm with the state department of insurance or a local agent.
How the threshold interacts with 1099s and subs
Independent contractors (1099) are generally not considered employees for WC purposes if they meet specific criteria (e.g., control test). Misclassification can lead to penalties. A general contractor is typically responsible for ensuring subcontractors carry WC. If a subcontractor does not have coverage, the general contractor may be liable for injuries to the subcontractor's employees.
Penalty for going without
Penalties include fines, stop-work orders, and potential criminal charges. Employers can be held personally liable for benefits. The financial penalty is usually a fraction of the human cost: an injured employee at an uncovered employer can sue directly under tort law instead of being limited to the workers comp benefit, exposing the owner to lost-wage damages, pain and suffering, and punitive damages without the corporate veil.
Related reading
FAQs
Who has to carry workers comp in Delaware?
All employers with one or more employees must carry workers' compensation insurance.
When does the requirement kick in for a new Delaware employer?
The clock starts on the first day the first qualifying employee is on the books. Delaware does not have a grace period for new employers, so a policy needs to be bound on or before the first hire date. Some agents can issue same-day binders for low-risk class codes.
What is the penalty for not having workers comp in Delaware?
Penalties include fines, stop-work orders, and potential criminal charges. Employers can be held personally liable for benefits.
Do 1099 contractors trigger the coverage requirement in Delaware?
Independent contractors (1099) are generally not considered employees for WC purposes if they meet specific criteria (e.g., control test). Misclassification can lead to penalties.
Are subcontractors counted toward the threshold in Delaware?
A general contractor is typically responsible for ensuring subcontractors carry WC. If a subcontractor does not have coverage, the general contractor may be liable for injuries to the subcontractor's employees.
What happens if I am audited and found non-compliant in Delaware?
Delaware typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Penalties include fines, stop-work orders, and potential criminal charges. Employers can be held personally liable for benefits. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.