Short answer: Yes. Maryland requires an employer with at least one covered employee to secure workers' compensation through an authorized insurer, the Chesapeake Employers' Insurance Company, or approved self-insurance. If the Workers' Compensation Commission finds an employer uninsured, it orders coverage and a penalty of up to $25,000, with another penalty up to $25,000 for ignoring the order.
Who must insure
Maryland's Labor and Employment Article, Title 9, applies to employers with one or more covered employees. Under §9-402, an employer must secure compensation by buying insurance from an authorized insurer or by qualifying to self-insure, individually or in a group.
Who is a covered employee
The statute defines covered employees broadly, including part-time workers and minors. It carves out specific groups, such as some real estate licensees paid by commission, certain farm workers under the statute's tests, and owners who elect out. Corporate officers and LLC members who meet the statute's ownership and filing rules can exclude themselves, but not their employees.
Penalties for failing to insure
Under §9-407, when the Commission finds an employer failed to secure coverage, it must:
- Order the employer to insure through an authorized insurer and submit proof to the Commission
- Order a penalty of up to $25,000, payable to the Uninsured Employers' Fund
If the employer doesn't comply within 30 days, the Commission can hold another hearing and impose an additional penalty of up to $25,000. Separately, an uninsured employer remains liable for an injured worker's benefits, and the Uninsured Employers' Fund can seek reimbursement.
Where coverage comes from
Maryland employers can buy from private insurers or from Chesapeake Employers' Insurance Company, which writes coverage in Maryland. Larger employers may qualify to self-insure.
Bottom line
If you have one employee in Maryland, buy coverage before work starts. Fines alone can exceed several years of premium for a small business. See our workers' compensation insurance overview.
Questions? Contact Alishahi Insurance or call (877) 711-4545. See insurance in Maryland.
Frequently asked questions
Is workers' comp required in Maryland for one employee?
Yes. An employer with at least one covered employee must secure coverage.
What is the penalty for no workers' comp in Maryland?
The Commission orders coverage and a penalty up to $25,000, plus up to another $25,000 for ignoring the order.
Where can Maryland employers buy workers' comp?
From authorized private insurers, Chesapeake Employers' Insurance Company, or through approved self-insurance.
Can Maryland business owners exclude themselves?
Qualifying corporate officers and LLC members can exclude themselves, but not their employees.
Does an uninsured Maryland employer still owe benefits?
Yes. The employer remains liable, and the Uninsured Employers' Fund can seek reimbursement.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.