Buying workers’ compensation for:


State Fund: No

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Vermont, some waivers are permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

Unless you have been approved to self-insure by the Department of Labor, you must buy workers’ compensation insurance if:

You hire one or more employees on a full or part time basis in Vermont, or you hire employees outside the state but they work for you in Vermont. Generally, everyone -- including officers of corporations -- is covered. Some exceptions are as follows:

If you are the sole proprietor or partner of an unincorporated business, you are not covered, and you are not required to have coverage, but you may choose to have it.

Officers of a corporation may choose to be excluded from workers’ compensation coverage, but must obtain prior approval from the Vermont Department of Labor.

You may choose to include a family member who lives with you.You do not have to obtain approval from the Vermont Department of Labor.

In addition, the following people are not required to be covered by workers’ compensation insurance:

  • A person whose employment is of a casual nature, and not for the purpose of the employers trade or business.
  • A person engaged in amateur sports, even if an employer contributes to the support of such sports.
  • A person engaged in agriculture or farm employment for an employer whose aggregate payroll is less than $2,000 in a calendar year, unless the employer chooses to provide coverage.
  • Certain elected officials are excluded.
  • Volunteers.

Factors that Impact Coverage

  • You are a sole proprietor or partner: In Vermont, you are excluded from coverage but have the option to include yourself.
  • You are a corporate officer or member of an LLC: Vermont includes you in coverage, but you have the option to exclude yourself.

Failure to Secure Compensation

An employer who fails to provide workers’ compensation insurance may be assessed a penalty of $50.00 per day, but not to exceed $5,000 for the period prior to receiving notice from the Commissioner of Labor. If you do not provide workers’ compensation insurance within 5 days of receiving notice, you may be assessed a penalty of $150 per day, beginning 5 days after the date on which you received notice. Failure to provide workers’ compensation insurance will have a negative impact on your legal defenses if you are sued by an injured employee. It can also lead to a state order closing your business.

Proof of Coverage is Required

The employer must post and maintain, in a conspicuous place in and about each of his places of business, typewritten or printed notices in form prescribed by the commissioner.

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.