An Idaho corporation is the employer, and if it has any employees it must carry workers compensation. Its officers are the one owner type that is not automatically exempt: a corporate officer is left out of coverage only if he owns at least 10 percent of the issued voting stock and, where the corporation has directors, is also a director. An officer who does not meet that test is not exempt and must be covered.
Who this is for: Owners of an Idaho C-corp or S-corp, whether it is a small closely held company with only officers or a corporation with a full payroll.
The short version
- Any employee means a policy is required (Idaho Code 72-301), from your first worker and in force before the first hire.
- Officers are not automatically exempt. Unlike a partner or LLC member, a corporate officer must clear an ownership and board test to be left out.
- The test is 10 percent plus a board seat. An officer is exempt only if they own at least 10 percent of the voting stock and, where the company has directors, are also a director (Idaho Code 72-212).
- An officer who fails the test must be covered. A minority officer under 10 percent, or one who is not a director where the board exists, is a covered employee.
- Non-owner employees are always covered from their first day once the corporation has any worker.
How officers are treated
Because the corporation is a separate legal person, it is the employer and its officers are its employees for comp unless the exemption reaches them. Idaho sets a two-part test to leave an officer out. The officer has to own at least 10 percent of the company's voting stock, and, if the corporation has a board of directors, has to be a director too. An officer who clears both is exempt by default and can elect back into coverage by filing a written declaration if they want their own injuries covered. An officer who owns less than 10 percent, or who is not on the board where a board exists, is not exempt at all and must be carried on the policy like any other employee. This is the reverse of the LLC and partnership rules, where any working owner is exempt without an ownership test.
What applies to your corporation
| Your corporation | Is the officer exempt? | Officer and employee notes |
|---|---|---|
| Sole owner-officer owning 100 percent, is a director | Yes, exempt by default | Not on the policy unless they elect in; any employees are still covered |
| Officer owning 30 percent and serving as a director | Yes, exempt by default | May elect in by filing if they want their own injuries covered |
| Officer owning 5 percent | No | Under the 10 percent line, so must be covered as an employee |
| Officer owning 20 percent but not a director (board exists) | No | Fails the director part of the test, so must be covered |
Deciding whether officers go on the policy
For an officer who clears the test and is therefore exempt, staying off the policy saves premium but leaves that officer to rely on their own health and disability coverage for a work injury; electing back in means comp pays their work injuries. For an officer who does not clear the test, there is no choice, they must be covered. Many small corporations cover all rank-and-file employees, keep hands-on owner-officers on the policy by electing them in, and only leave off an exempt officer who works entirely away from the shop floor. An owner who works on a job site is exactly the kind of person who benefits from being on the policy.
An Idaho Falls example
Illustrative, not a quote. An Idaho Falls manufacturer is an S-corp with a president who owns 70 percent and sits on the board, a plant manager who is an officer but owns 5 percent, and four production employees. All four production workers are covered from day one. The plant manager owns under 10 percent, so he is not exempt and must be carried too. The president clears the 10 percent-and-director test, so he is exempt by default, but because he works on the floor he files a written declaration to elect himself back in. See our workers comp for manufacturers page.
Real questions Idaho owners ask
Does my Idaho corporation need workers comp?
If it has any employees, yes, from your first worker and in force before they start. Non-owner employees must always be covered, and an officer is only left out if they clear the ownership and board test.
Are corporate officers exempt from workers comp in Idaho?
Only if they qualify. A corporate officer is exempt only when they own at least 10 percent of the voting stock and, where the company has directors, are also a director. An officer who fails that test must be covered.
Can a minority officer who owns 5 percent be left off the policy?
No. An officer under the 10 percent ownership line is not exempt and must be covered as an employee. The exemption reaches only officers at 10 percent or more who also sit on the board where one exists.
Does an officer have to be a director to be exempt?
Where the corporation has a board of directors, yes. The officer must both own at least 10 percent of the voting stock and be a director. If the corporation has no directors, only the ownership part applies.
We are a small corporation with only owner-officers. Do we need a policy?
Only if you have employees. With no non-owner employees and officers who all clear the exemption test, the state does not require a policy, though a client contract still might.
Can an exempt officer still get their own injuries covered?
Yes. An officer who is exempt can elect back into coverage by filing a written declaration with the Idaho Industrial Commission, which is often worth doing when the officer does hands-on work.
Do we still cover employees if an owner-officer is exempt?
Yes. An officer being exempt only affects that officer. Every non-owner employee must be covered from their first day once the corporation has a worker, no matter what the officers qualify for.
Why Idaho owners choose Morrow
- We shop the right market for you. In Idaho you can buy workers' comp from any of the hundreds of private insurers licensed here, or from the state-chartered Idaho State Insurance Fund, which competes right alongside them. That lets us shop your rate widely, and if your work is too risky for any of them, there's a state-backed fallback plan that still has to cover you.
- 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 Idaho guides
Every Idaho 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 Idaho (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- 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)
- Hiring your first employee: what changes
- Workers comp vs employers liability
- Idaho manufacturer workers comp
This guide is general information, not legal advice. Idaho rules and penalty amounts can change, so verify current requirements with the Idaho Industrial Commission or a licensed advisor before you rely on them. Last updated: July 2026.