Workers comp coverage required in South Carolina
Employers with 4 or more employees are generally required to carry workers' compensation insurance. Verified 2026-05-09.
Who must carry workers comp in South Carolina?
South Carolina workers compensation coverage is required Employers with 4 or more employees are generally 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 South Carolina 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 workers) are generally not considered employees for workers' compensation purposes, but misclassification can lead to penalties. General contractors are generally responsible for ensuring subcontractors carry workers' compensation insurance, or they may be held liable for injuries to the subcontractor's employees.
Penalty for going without
Failure to carry required workers' compensation insurance can result in fines, stop-work orders, and personal liability for employee injuries. 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 South Carolina?
Employers with 4 or more employees are generally required to carry workers' compensation insurance.
When does the requirement kick in for a new South Carolina employer?
The clock starts on the first day the first qualifying employee is on the books. South Carolina 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 South Carolina?
Failure to carry required workers' compensation insurance can result in fines, stop-work orders, and personal liability for employee injuries.
Do 1099 contractors trigger the coverage requirement in South Carolina?
Independent contractors (1099 workers) are generally not considered employees for workers' compensation purposes, but misclassification can lead to penalties.
Are subcontractors counted toward the threshold in South Carolina?
General contractors are generally responsible for ensuring subcontractors carry workers' compensation insurance, or they may be held liable for injuries to the subcontractor's employees.
What happens if I am audited and found non-compliant in South Carolina?
South Carolina typically issues a stop-work order, assesses back premium for the period of non-coverage, and adds penalties on top. Specifically: Failure to carry required workers' compensation insurance can result in fines, stop-work orders, and personal liability for employee injuries. Severe or repeat violations can lead to criminal charges and personal liability for the business owner, separate from the corporate veil.