Vermont Workers' Compensation Insurance

Vermont requires workers' compensation coverage from any employer who hires one or more employees, full-time or part-time, with no exemption based on business size. Owners of unincorporated businesses (sole proprietors and partners) are automatically excluded from the coverage requirement for themselves but can still be required to insure any employees they hire. See the Vermont Department of Labor's employer guide.

Vermont places the burden on the hiring employer to show that a 1099 worker genuinely meets the legal definition of an independent contractor, weighing factors like who controls the work, who supplies tools, and how the work is performed; a business remains responsible for a subcontractor's coverage if that subcontractor turns out to be uninsured or doesn't meet the independent-contractor test. Collecting a current certificate of insurance from subcontractors before work begins is the standard way employers protect themselves.

Injured workers receive necessary medical treatment with no dollar cap. Temporary disability benefits are calculated as a share of the worker's average weekly wage, subject to minimum and maximum compensation rates that the Vermont Department of Labor adjusts annually; employers and workers should check the Department's current-year rate table for the exact figures in effect. Permanent disability and death benefits are calculated separately under Vermont's workers' compensation statute.

Vermont's small-business base includes contractors and trades, restaurants and hospitality tied to the state's tourism economy, salons and personal-care businesses, and professional service firms, all of which typically need workers' comp once they bring on staff.