Massachusetts Workers' Compensation Insurance

Massachusetts’ workers’ compensation system is strict: You must carry insurance if you have any employees, including family members.

A workers’ comp policy protects both employer and employee when a work-related injury or illness occurs.

Employers must carry an active workers’ compensation insurance policy for all employees, whether full-time, part-time or family. The owner must also be covered if considered an employee.

Exceptions

The few exceptions to this rule include:

• Domestic employees who must work less than 16 hours a week.
• Members of a limited liability company (LLC), partners of a limited liability partnership (LLP), or sole proprietors of an unincorporated business.*  
• Corporate officers who own at least 25% interest in the corporation can request an exemption from workers’ compensation coverage.*
• Real estate agents working on a commission basis.
• Taxi drivers who lease their cabs on a fee basis and who are not treated as an employee under federal tax law.

*Note: This exemption does not apply to employees who are not members or officers. Employees must still be covered.

Independent Contractors

In Massachusetts, workers are presumed to be employees, unless enough evidence suggests otherwise. Companies hiring contractors should be sure workers operate independently and comply with state requirements.

Out-of-State Employers

If you have an all states endorsement, check with your insurance carrier or state authority to see if yours is compliant with Massachusetts law.

Unless the workers’ compensation policy has an all states endorsement, coverage is only in effect within state lines. Additional coverage must be secured to protect employees and comply with state law when workers travel across state lines.

Massachusetts strictly enforces its workers’ compensation law. The state may issue a stop work order (SWO) to employers who don’t have workers’ comp insurance, and minimum fines are $100 per day. Employers can also be subject to criminal charges, or debarment from public contracts.

Massachusetts workers comp rates decreased on average 12.9% in 2018. Rates are set by the Workers' Compensation Rating and Inspection Bureau of Massachusetts, and vary based on industry. Insurers must abide by state-wide rates, but can apply credits and debits on an individual basis to calculate the final quote.

While compliance depends on the number of employees, insurance premium is set based on total payroll. It’s often represented as the rate per hundred dollars in payroll.

Massachusetts construction workers were a disproportionate number of opioid-related deaths in 2011 - 2015, a disturbing trend under recent investigation by the state. Researchers also found a correlation between higher fatal opioid-related overdoses and occupations with higher rates of work-related injuries and illnesses.

Work comp covers wage replacement and medical bills for employees injured on the job. To protect against other injuries at your place of business, you may need general liability insurance.

Massachusetts Work Comp Resources

• Massachusetts workers’ compensation regulation: Massachusetts Department of Industrial Accidents
• Massachusetts rating bureau and assigned risk pool managed by: The Workers' Compensation Rating and Inspection Bureau of Massachusetts