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What is Workers’ Compensation Insurance?

Workers’ compensation insurance is a no-fault benefits system where employers obtain insurance that covers the cost of medical care, physical and vocational rehabilitation, medical equipment and lost wages for workers whose job-related accident resulted in injury, disease or death. Your policy coverage provides protection against liability arising under workers’ compensation law.

Why Do Employers Need It?

Employers are required by Maryland law to obtain workers’ compensation insurance from a licensed insurance company. (With prior approval from the Workers’ Compensation Commission, larger employers can be self-insured for workers’ compensation.)

Do All Maryland Employers Need to Purchase Workers’ Comp.?

With very few exceptions, ALL employers in the State of Maryland with at least one employee part-time or full time must obtain coverage. Per the Workers’ Compensation Law of Maryland in general, an individual must be covered by Workers’ Compensation insurance while in the service of an employer under an express or implied contract.

Can Officers Exclude Themselves From Coverage?

Under Maryland law, (1) any officer of a close corporation whether incorporated in Maryland or elsewhere; (2) any member of an LLC; (3) any member of a P.A.; or (4) up to five officers of any other corporation, can elect to exclude themselves from Workers’ Compensation coverage. Sole Proprietors and Partners are automatically excluded and must elect to include themselves.