Maryland Workers' Compensation Insurance

Sole proprietors, partners, LLC members, and corporate officers are presumed to need coverage unless they take affirmative action to exclude themselves; simply not buying a policy isn't enough to be considered exempt. An owner who wants to opt out must own at least 20% of the business, actively work in it, and file Maryland's exclusion form (IC-16) online with the Workers' Compensation Commission. Until that exclusion is on file, these owners are treated as covered employees for compliance purposes.

Employers who fail to secure required coverage face a fine of not more than $10,000, and the officers responsible for a corporation's general management in Maryland can be held personally liable for that fine. Maryland's Workers' Compensation Commission has also stepped up enforcement around owner exclusion filings specifically, with initial fines in the $250-$2,500 range and hearing-stage fines that can run $10,000-$25,000 for businesses without either an active policy or a properly filed exclusion. An injured worker at an uninsured employer can pursue benefits through Maryland's Uninsured Employers' Fund, which then seeks reimbursement from the employer.

Maryland is a competitive market state rated by NCCI, so our agency can compare coverage across the many private carriers writing business here. Chesapeake Employers' Insurance Company (formerly the state's Injured Workers' Insurance Fund) is Maryland's own competitive insurer, open to any employer and historically a resource for harder-to-place risks. Small employers should be aware that Maryland actively audits owner exclusion filings, so it's worth confirming with an agent whether an owner's IC-16 exclusion is on file before assuming they're exempt from coverage.