Workers comp coverage required in Maryland
All employers with one or more employees are required to carry workers' compensation insurance. Verified 2026-05-09.
Who must carry workers comp in Maryland?
Maryland workers compensation coverage is required All employers with one or more employees are required to 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 Maryland 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
Maryland uses the 'right to control' test to determine if a worker is an employee or an independent contractor. Misclassification can lead to penalties. General contractors are responsible for ensuring subcontractors carry workers' compensation coverage; otherwise, the general contractor may be liable for injuries to the subcontractor's employees.
Penalty for going without
Employers failing to carry workers' compensation insurance may face fines, stop-work orders, and personal liability for injured workers' 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 Maryland?
All employers with one or more employees are required to carry workers' compensation insurance.
When does the requirement kick in for a new Maryland employer?
The clock starts on the first day the first qualifying employee is on the books. Maryland 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 Maryland?
Employers failing to carry workers' compensation insurance may face fines, stop-work orders, and personal liability for injured workers' benefits.
Do 1099 contractors trigger the coverage requirement in Maryland?
Maryland uses the 'right to control' test to determine if a worker is an employee or an independent contractor. Misclassification can lead to penalties.
Are subcontractors counted toward the threshold in Maryland?
General contractors are responsible for ensuring subcontractors carry workers' compensation coverage; otherwise, the general contractor may be liable for injuries to the subcontractor's employees.
What happens if I am audited and found non-compliant in Maryland?
Maryland typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Employers failing to carry workers' compensation insurance may face fines, stop-work orders, and personal liability for injured workers' benefits. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.