Maryland employers are required to carry workers’ compensation insurance.
Workers’ compensation, also called workers’ comp, workmans comp and work comp, compensates employees for injuries or illnesses they sustain at work. Workers’ compensation insurance, which is often used interchangeably, is the commercial insurance policy most employers must purchase to provide this kind of coverage.
Unlike other insurance policies, workers’ comp is regulated at the state level, so rates and coverage requirements differ from one state to the next. Below we cover what Maryland small business owners need to know about workers’ compensation insurance.
Businesses with one or more employees, whether part-time or full-time, must have a workers’ compensation insurance policy.
Maryland law allows some officers and LLC members to exclude themselves from workers’ compensation coverage. Sole proprietors and partners are automatically excluded from coverage and must elect to include themselves.
An expert in workers’ compensation insurance can help you determine which employees can choose to exclude themselves, and help you comply with your state’s laws.
Maryland has a private market. You can purchase a workers' compensation policy from any insurance carrier or agency that is licensed to write in that state.
Maryland also has a state fund that competes with the private market. You can contact the Chesapeake Employers' Insurance Company (previously known as the Injured Workers Insurance Fund) if you are having trouble finding coverage.
The cost of a small business workers’ compensation policy will vary based on business size, location, industry and claims history. Maryland, like many U.S. states, uses the National Council on Compensation Insurance to advise rates. NCCI collects data on workplace injuries and workers’ compensation claims, and uses it to assign rates by class code, or industry.
Insurers licensed in Maryland use the state-approved base rates to determine the final insurance premium, also factoring in business details like years in business, past claims and formalized safety programs. Learn more about how workers’ compensation costs are calculated.
NCCI has filed rate decreases in Maryland the past several years. In 2018, NCCI filed a decrease of -13.0%.
Editor’s note: Last updated January 16, 2019