North Carolina

Buying workers’ compensation for:

North Carolina

State Fund: No

Insurance Coverage Requirements: Workers’ Compensation is compulsory in North Carolina, no waivers are permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

If you are a sole proprietorship, partnership, LLC, estate, or trust, you are required by law to carry coverage once you have three (3) employees who are regularly employed, in addition to the sole proprietor, partners, formulators of the LLC, executor of the estate, and bearer of the trust. It does not matter if these employees are full time, part time, regular seasonal or family members except that agricultural employments with fewer than ten (10) regular employees, certain sawmill and logging operators and all domestic employees are exempt.

If you are incorporated, including all forms of corporations and those which have non-profit status, you are required by law to carry coverage once you have a total of three (3) people in the corporation. Everyone is included in the headcount, including corporate officers. For example, a corporation with two officers and one employee would be required to provide workers’ compensation coverage.

Businesses with radiation are required by law to carry coverage when they have one (1) employee. An agricultural operation must carry coverage when there are ten (10) or more regular, non-seasonal employees. Any other business entity not mentioned above would use the three (3) or more employees rule.

Corporate officers, sole proprietors or partners, may choose to exempt themselves from coverage or elect to have themselves covered.

Factors that Impact Coverage

  • You are a sole proprietor, partner or member of an LLC: In North Carolina, you are excluded from coverage but have the option to include yourself.
  • You are a corporate officer: North Carolina includes you in coverage, but you have the option to exclude yourself.
  • Your employees are exposed to radiation: You must have workers’ compensation insurance if you have one or more employee.

Failure to Secure Compensation

Employers not in compliance may be subject to penalties between $50.00 to $100.00 for each day of non-compliance until proper coverage is obtained.

Proof of Coverage is Required

ll employers subject to the provisions of the Workers’ Compensation Act shall post in a conspicuous location in places of employment a Form 17, Workers’ Compensation Notice, to give notice to the employees that they are in an employment subject to the provisions of the Workers’ Compensation Act and that their employer has obtained workers’ compensation coverage or has qualified as self-insured for workers’ compensation purposes.

Should the employer allow its workers’ compensation coverage to lapse or cease to qualify as a self-insured, the employer shall remove within five working days any Form 17 and any other notice indicating otherwise.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Key Resources

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.