Why Do You Need Maryland Workers’ comp?

The State of Maryland requires workers’ comp insurance for employers with one or more full-time or part-time employees unless exempted by law. Agricultural workers are exempt unless the employer’s payroll exceeds $15,000 or if the employer has three or more employees.

Sole proprietors may elect to be included at a salary rate determined by rule. Workers’ comp Insurance includes corporate officers and LLC partners and shareholders, and these groups have the right to opt out of coverage. Owners generally have an exemption but can opt in or out of coverage. Workers’ comp insurance rules require formal inclusion and rejection decision; to be in or out of coverage, one must file a rejection-inclusion option form.

Buying Workers’ Compensation in Maryland

Employers can buy insurance coverage in three ways. The private marketplace, the assigned risk pool, and self-insurance.

  • 1

    Open market

    The most cost-effective way to get coverage is through the open market. Many employers work with an agent or broker to gain the benefits of their knowledge and experience.

  • 2


    Self-insurance requires proof of financial ability to cover liability and an audited set of financials to show stability. The Department of Insurance must approve self-insurance applications.

  • 3

    Assigned Risk Pool

    Chesapeake Employers’ Insurance Company is the insurer of last resort, but it also competes with companies on the voluntary market. Chesapeake sets occupational classifications that sometimes vary from NCCI.

Instructions for Buying

Maryland offers three convenient choices for employers to meet the legal requirement for workers’ compensation coverage.

Voluntary Market

Employers should try to buy workers’ comp coverage on the voluntary market. You can shop and compare prices and coverage to find the best fit for your needs and budget. Many employers find it easier to use a licensed agent or broker. They are knowledgeable about legal requirements, and they know the market.


Companies can apply for permission to self-insure. They must present a detailed plan and a complete set of audited financial statements. The Department of insurance must approve self-insurance plans.

Assigned Risk Pool

If you cannot get a private company to accept your application, then you must use the assigned risk pool. In Maryland, the assigned risk pool is the Chesapeake Employers’ Insurance Company. Chesapeake competes with private sector providers and is not just an assigned risk pool insurer. The open competition model helps keep assigned pool prices in line with competitive pricing on the open market.

What You Should Know About Workers’ comp In Maryland

Nearly every worker age 17 and under must have a Maryland work permit. Employers of underage workers without permits face penalties under the workers’ comp laws. Employers of an injured underage worker must pay double the amount that would have been due to a covered worker. The employer is solely liable for the costs and penalties because there is no workers’ comp coverage for underage workers without permits.

Is Your Business Required to Carry?

Every business with one or more employees must have coverage. Truck owner-operators are not required to have coverage but can do so voluntarily. Domestic workers must have coverage if their annual wages exceed $1000.00 per quarter. Agricultural employers must have coverage if they have three or more employees or a payroll exceeding $15,000 per year.

Where to Buy Insurance?

You can buy insurance from any licensed insurance provider, agent, or broker. If you prefer, you can apply to get permission to self-insure and run a program based on your company’s financial strength. If you cannot get insurance on the open market, you can buy from Chesapeake Employer’s Insurance.

How Much Does Workers’ comp Insurance Cost?

Based on the last year for which 50 states data is available, Maryland had a rate of $1.07 per $100 in payroll. This rate put the state in the lower quarter, among the least expensive state averages. The actual price of insurance depends on the occupations involved and the employers MOD or claims history.

In Maryland, the NCCI sets rates, but the Chesapeake Employer’s Insurance company also sets rates which vary from NCCI. You should not rely on the NCCI rate until checking with Chesapeake.

What Is the Cost Of Not Getting Workers’ comp Insurance?

The Maryland Government can fine an uninsured Maryland employer up to $10,000. The law holds officers of uninsured Corporations liable for payment of the fine. Workers without employer coverage can get compensation from the uninsured employer fund for which the uninjured employer remains responsible.

List Of Places You Can Get Workers’ comp Or More Info

Chesapeake Employers’ Insurance Company

(formerly Injured Workers’ Insurance Fund)


Chesapeake Employers’ Insurance (formerly IWIF) provides workers’ comp insurance coverage and claims adjustment services to Maryland employers. It accepts those that cannot get coverage on the voluntary market.

MIA – Maryland Insurance Administration


MIA authorizes insurance business in the state and oversees compliance with laws and regulations.

The U.S. Department of Labor OWCP

Office of Workers’ Compensation Programs


OWCP is a federal agency that manages compensation programs for federal workers in Maryland.

Workers’ compensation Commission


This is the primary state office that administers the workers’ compensation program.

Maryland Workers’ Compensation Commission

10 East Baltimore Street

Baltimore, MD 21202-1641

(410) 864-5100

1 (800) 492- 0479

Factors That Impact Coverage


The costs of workers’ compensation coverage must be paid by the employer. An employer that deducts wages or requires an employee to pay shall be guilty of a misdemeanor under Maryland criminal law.


Maryland law allows policies that provide for incidental coverage when employees work out of state. This coverage does not apply to extended outside of state assignments. For extended work outside of Maryland, you must get coverage. You should consult your carrier for terms.


Employee rates depend on the occupational classification for each worker. The insurer then adds to the premium based upon risk. The MOD or employer history of claims to determine the final costs per employee. Maryland is an NCCI state, and the National Council on Compensation Insurance sets rates. The Chesapeake Employers Insurance Company is the assigned pool administrator, and it also sets rates. Chesapeake sometimes modifies the NCCI classifications.

Other Helpful Tips

Contractors must ensure that subcontractors have coverage or they will be liable for the premiums and penalties. Prime contractors should get certification in writing and verify it with the State government before accepting a subcontractor in the job site.


Maryland makes coverage easy and convenient for employers. The state’s laws are particularly harsh when employers fail to get coverage or fail to ensure underage workers have work permits. Maryland employers should get coverage whether required or not. The benefits to their employees and protection from civil liability make workers’ comp coverage a desirable form of financial protection.


  • Maryland Q&A for Employers

  • Maryland Workers’ comp Commission