If your Idaho LLC has any employees, yes, it needs workers compensation, but the working members themselves are exempt by default. Idaho names a working member of a limited liability company as one of the owner types that is left out of coverage automatically, so a member is not on the policy unless they choose to elect in by filing a written declaration with the Idaho Industrial Commission.
Who this is for: Idaho LLC owners, whether a single-member LLC with no staff, a multi-member LLC, or an LLC running a payroll of employees.
The short version
- Any employee means a policy is required (Idaho Code 72-301), from your first worker, with no headcount minimum, and in force before the first hire.
- Members are exempt by default. Idaho treats a working LLC member as outside coverage automatically, the reverse of states that cover members by default.
- You elect in by filing. A member who wants their own injuries covered files a written declaration of election with the Industrial Commission (Idaho Code 72-213).
- Electing yourself in does not change your staff. Any non-owner employee must be covered from day one no matter what the members choose.
- A single-member LLC with no staff owes no state-required policy, though a contract may still call for one.
How Idaho treats LLC members
This is the part owners get backward. Idaho does not cover members by default the way some states do; it lists the working member of an LLC among the owner types that are exempt, alongside sole proprietors and working partners. A member who does nothing is simply not on the policy, which is fine for an owner who is comfortable using their own health and disability coverage for a work injury. A member who does want comp on themselves elects in by filing a written declaration of election with the Industrial Commission; the coverage takes effect on the date stated in that declaration, provided the required policy is on file. There is no ownership-percentage test for an LLC member the way there is for a corporate officer, so any working member can elect in.
What applies to your LLC
| Your LLC setup | Is comp required? | What owners and staff should know |
|---|---|---|
| Single-member, no employees | No | No employees means no required policy; the member is covered only if they elect in and carry one |
| Two members, no other staff | Usually no | With no employees no policy is required; members are exempt unless each elects in by filing |
| Members plus any employees | Yes | Employees covered from day one; members exempt by default, may elect themselves in |
| A member who wants their own injuries covered | Elect in | File a written declaration of election with the Industrial Commission; no ownership percentage required |
Exempt by default, or electing in
Because members start outside coverage, the first thing to check is whether any member does hands-on work with real injury risk. A member who frames houses or runs a cleaning route carries the same exposure as any employee, and their own health plan may refuse a work-related injury, so electing in is worth pricing. A member who only handles the books can usually stay off the policy. 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, and it does not cover a member who never elected in.
A Meridian example
Illustrative, not a quote. A two-member cleaning LLC in Meridian hires its first regular employee. That hire makes a policy mandatory, and the new worker is covered from day one. Both members are exempt by default, so neither is on the policy automatically. The member who cleans alongside the crew files a written declaration to elect herself in, so a fall on a job would be paid by comp, while the member who only handles scheduling stays off to save premium. When a property manager asks for proof of coverage before a contract, the LLC produces a certificate the same day. See our workers comp for cleaning businesses page.
Real questions Idaho owners ask
Does my Idaho LLC need workers comp?
If the LLC has any employees, yes, from your first worker and in force before the first hire. The working members themselves are exempt by default and are only covered if they elect in by filing a written declaration.
Are LLC members covered by default in Idaho?
No. Idaho treats a working LLC member as exempt automatically, the opposite of states that cover members by default. A member is off the policy unless they file a written declaration to elect coverage.
How does an LLC member opt into coverage in Idaho?
By filing a written declaration of election with the Idaho Industrial Commission. The coverage takes effect on the date stated in the declaration, as long as the required policy is on file. There is no ownership-percentage test for a member.
Does a member need to own a certain percentage to elect in?
No. Unlike a corporate officer, a working LLC member does not have to meet a 10 percent ownership test to be treated a certain way. Any working member is exempt by default and any working member may elect in.
My LLC has two members and no staff. Do we need a policy?
Usually not by state law, because there is no employee yet. If a member wants their own on-the-job injuries covered, they can still buy a policy and elect themselves in.
Does my single-member LLC need workers comp in Idaho?
Not by state law if you have no employees. Many single-member LLCs still buy a policy when a client or general contractor requires proof of coverage, and the member is then covered only if they elect in.
Do I have to cover employees even if the members stay exempt?
Yes. A member staying exempt only affects that member. Any non-owner employee must be covered from their first day once the LLC has a worker, and the members' choice does not change that.
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'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)
- Hiring your first employee: what changes
- What workers comp does not cover
- Idaho cleaning business 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.