If your Alaska LLC has any non-owner employees, yes, it must carry workers compensation insurance, because Alaska requires coverage once you have one employee. The twist for an LLC is the members themselves: a member is automatically left off coverage only if they hold at least 10 percent of the company, and a member holding less than 10 percent is treated as an employee who must be insured. So the size of your stake, not just the fact that you are a member, decides whether you can be left off.
Who this is for: Owners of an Alaska LLC, whether a single-member LLC with no staff, a multi-member LLC, or an LLC running a payroll of W-2 employees.
The short version
- An LLC with any non-owner employee must carry workers comp; there is no headcount threshold once employees exist.
- A member who holds at least 10 percent of the LLC is automatically exempt from coverage.
- A member who holds less than 10 percent is treated as an employee who must be insured.
- An exempt member can still opt in through the policy if they want comp to pay their own on-the-job injuries.
- Clients and general contractors routinely require proof of coverage before your LLC can start work.
How Alaska treats LLC members
Alaska does not treat every LLC member the same. Since August 1, 2019, the state has drawn the line at a 10 percent ownership stake. A member who holds 10 percent or more of the company is automatically exempt, meaning the law does not require the LLC to cover that member, and their pay stays out of the premium. A member who holds less than 10 percent is considered an employee and must be insured like any other worker. Ownership held through a parent company counts toward a member's stake in a subsidiary. An exempt member who wants their own injuries covered can still choose to be included on the policy. Either way, the moment the LLC has a non-owner employee, that employee must be covered from day one.
What applies to your LLC
| Your LLC setup | Is comp required? | What owners and staff should know |
|---|---|---|
| Single-member, member holds 100 percent, no staff | Generally no | The member is automatically exempt; you may opt in for your own protection |
| Multi-member, all hold 10 percent or more, no staff | Generally no | Each member is automatically exempt; any may opt in through the policy |
| A member holds less than 10 percent | Yes, for that member | That member is an employee who must be insured |
| Any LLC with non-owner employees | Yes | Employees covered from day one; 10-percent-plus members stay exempt unless they opt in |
Opting in, or staying exempt
Because a 10-percent-or-more member starts out exempt, the choice for that member is whether to opt in. If you want your own on-the-job injuries paid by comp, you ask to be included on the policy and your pay is rated into the premium. If you would rather keep your pay out of the premium and rely on other coverage for yourself, you simply stay exempt. Many owner-run LLCs that hire staff keep the employees on the policy and decide member by member whether the qualifying owners opt in. The limited liability in an LLC shields your personal assets from many business debts, but it does not by itself answer an injured employee, which is exactly what comp is built to handle.
A Juneau example
Illustrative, not a quote. A two-member electrical contracting LLC in Juneau runs the business with one W-2 apprentice. Both members hold half the company, so each is automatically exempt, but the apprentice must be covered from day one, so the LLC needs a policy. Both members work in the field pulling wire and decide to opt themselves in so a shock or a fall would be covered. When a builder they want to work for requires proof of coverage, the LLC already has a policy and can produce a certificate the same day. We make sure the electrical work is rated correctly so the price is fair. See our workers comp for electricians page.
Real questions Alaska owners ask
Does my Alaska LLC have to carry workers comp?
If it has any non-owner employees, yes, from the first one. If it is only members, a member holding at least 10 percent is automatically exempt, but a member under 10 percent must be covered.
Am I covered as an LLC member in Alaska?
Not automatically. A member with at least 10 percent ownership is exempt from the mandate, so the LLC is not required to cover you. You can opt in through the policy if you want your own injuries covered.
What if a member owns less than 10 percent of the LLC?
Then Alaska treats that member as an employee who must be insured. The 10 percent line, in place since August 2019, is what separates an exempt owner from a member who has to be covered.
Do I need comp for a single-member LLC with no employees?
Generally no. A sole member who holds 100 percent is automatically exempt, so the law does not require a policy. Many single-member owners still opt in or buy a small policy to get a certificate for clients.
How do I get my own injuries covered as an exempt member?
You ask to be included on the LLC's policy. Your pay is then rated into the premium and comp will pay your on-the-job injuries, which a health plan may not fully cover.
Does having W-2 employees change things for my LLC?
Yes. Even one non-owner employee makes coverage mandatory from day one. The policy covers your employees and protects the LLC, so an injured worker generally cannot sue the business directly.
Why do clients ask my LLC for proof of coverage?
General contractors, landlords, and commercial customers require proof to manage their own risk. Even when you have covered everyone required, you usually cannot start the job without showing a certificate.
Why Alaska owners choose Morrow
- We shop the right market for you. In Alaska you buy workers' comp on the open, competitive market from a private insurer authorized by the state, because Alaska has no state fund and no opt out, and if no carrier will take you the NCCI-run assigned risk pool is the guaranteed backstop, so we can shop your rate freely and still have a fallback for hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Alaska guides
Every Alaska business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Alaska (start here)
- Workers comp: the owner's overview
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- What workers comp does not cover
- Alaska electrician workers comp
This guide is general information, not legal advice. Alaska rules and penalty amounts can change, so verify current requirements with the Alaska Division of Workers' Compensation or a licensed advisor before you rely on them. Last updated: July 2026.