If your Indiana nonprofit has any paid employees, yes, it must carry workers compensation, because being a nonprofit does not exempt you from the Worker's Compensation Act. Tax-exempt status changes how you file with the IRS, not your duty to cover the people who work for you. The main wrinkles for a nonprofit are volunteers, who are usually not employees, and executive officers of the organization, who are handled differently than a for-profit's officers.
Who this is for: Indiana nonprofit and charitable organizations with paid staff, or about to make a first hire, including community groups, religious and educational organizations, and social-service agencies.
The short version
- A nonprofit with paid employees must carry workers comp, the same as any Indiana business.
- Being tax-exempt does not exempt you from covering your employees.
- True volunteers who are not paid are generally not employees, so they usually are not required to be covered.
- A nonprofit's executive officers are left off by default and can be brought in through the policy.
- Grant agreements, landlords, and partner agencies often require proof of coverage before you can operate.
Paid staff, volunteers, and officers
Indiana treats a nonprofit like any other employer when it comes to paid workers: hire one employee and you must cover them from day one. Volunteers are usually different. Someone who genuinely donates their time for no pay is generally not an employee, so they typically are not required to be on the policy, though some organizations choose to arrange separate accident coverage for active volunteers. Executive officers of a charitable, religious, educational, or nonprofit corporation are their own category: Indiana leaves them off by default, and the organization can bring an officer within coverage by specifically including that officer in the insurance contract.
| Who they are | Employee for comp? | What to do |
|---|---|---|
| Paid staff (full or part time) | Yes | Must be covered from day one |
| True unpaid volunteers | Usually no | Not required; optional accident coverage available |
| Executive officers of the nonprofit | Off by default | Bring them in by including them in the policy |
| Stipend or paid interns | Often yes | Treat like employees if they are paid for work |
Where the gray areas hide
Two situations catch nonprofits out. The first is the paid volunteer: if you give someone a stipend, a regular allowance, or in-kind pay for doing work, they may look like an employee rather than a true volunteer, and that can pull them into the coverage requirement. The second is the working board member or officer who also does day-to-day paid work; the safest move is to decide deliberately whether to include each officer in the policy rather than assume they are outside it. When you are unsure whether someone counts, treat the question the way Indiana does, by looking at whether they are really paid to work for you.
A South Bend example
Illustrative, not a quote. A South Bend food-bank nonprofit has four paid staff and dozens of weekend volunteers. The four paid staff must be covered from day one. The unpaid volunteers are generally not employees, so they are not required to be on the comp policy, though the board chooses to add a separate volunteer accident plan for peace of mind. The organization also includes its paid executive director in the workers comp policy so that officer is covered on the job. A grant agreement requires proof of coverage, which the nonprofit provides with a certificate. See our workers comp for nonprofits page.
Real questions Indiana owners ask
Does our Indiana nonprofit need workers comp?
If you have any paid employees, yes. A nonprofit is an employer like any other under Indiana law, so tax-exempt status does not remove the duty to cover your paid staff from day one.
Do we have to cover our volunteers?
Usually not. A genuine unpaid volunteer is generally not an employee, so they are not required to be on the policy. Some nonprofits still add a separate accident plan to protect active volunteers.
Are our executive officers covered?
Not by default. Indiana leaves a nonprofit's executive officers off unless the organization specifically includes them in the insurance contract, so decide deliberately whether to bring each officer in.
What about a volunteer who gets a stipend?
That can change the answer. If someone is paid a stipend or in-kind compensation for doing work, they may look like an employee rather than a true volunteer and could need to be covered. Look at whether they are really paid to work.
Do paid interns count?
Often yes. If an intern is paid for their work, they generally count as an employee for comp. Unpaid interns are closer to volunteers, but the paid ones usually must be covered.
Why do our funders ask for proof of coverage?
Grant agreements, landlords, and partner agencies want proof to manage their own risk. Even when you have covered everyone required, you often cannot sign the agreement or use the space without a certificate.
We only have one part-time employee. Do we still need it?
Yes. Indiana has no part-time exception and no headcount minimum, so a single part-time paid employee makes coverage mandatory for your nonprofit just as it would for a business.
Why Indiana owners choose Morrow
- We shop the right market for you. In Indiana you buy workers comp on the open, competitive market from any private insurer licensed in the state, because there is no state fund, and if no carrier will take you the state's assigned risk plan 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 Indiana guides
Every Indiana 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 Indiana (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?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: 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
- Indiana nonprofit workers comp
This guide is general information, not legal advice. Indiana rules and penalty amounts can change, so verify current requirements with the Worker's Compensation Board of Indiana or a licensed advisor before you rely on them. Last updated: July 2026.