Most Maryland businesses need workers compensation the moment they have their first employee, general liability that clients and landlords insist on, and property or a package policy for their gear. Workers comp is the one Maryland law actually forces on you: under the state's Workers' Compensation Act (Labor and Employment Article, Title 9) almost every employer with even a single covered employee must secure coverage, and Maryland counts part-time, seasonal, and family workers, along with working LLC members and corporate officers.
Who this is for: Maryland owners, from a one-truck contractor in Baltimore to a 25-person shop in Montgomery County, who want to know what the state requires, what their contracts require, and how to buy it without overpaying.
The short version
- Workers comp is required as soon as you have one covered employee. Maryland has no general head-count minimum, unlike some neighboring states.
- The count is broad. Part-time, seasonal, family members, and minors all count; a casual employee and some domestic and farm workers are the narrow exceptions.
- Owners are treated in opposite directions. Sole proprietors and partners are out by default and opt in; working LLC members and corporate officers are covered by default and must qualify to opt out.
- General liability is not a state mandate, but nearly every lease, client contract, and general contractor requires it before you can start work.
- You buy on the open market. Private carriers compete for your business, and the state fund, Chesapeake Employers, is the guaranteed backstop.
What Maryland actually requires
Only a couple of these are true legal mandates. The rest get required by the people you do business with, which in practice is just as binding.
| Coverage | Required by Maryland law? | Who needs it | What is at stake |
|---|---|---|---|
| Workers compensation | Yes, once you have one covered employee | Almost every employer | Penalty up to 25,000 dollars, a misdemeanor charge, a lawsuit you cannot defend normally |
| Commercial auto | Yes, if you own or use business vehicles | Any business-owned or leased vehicle | Registration problems, uninsured liability |
| General liability | No state mandate | Required by most leases, clients, and general contractors | Lost contracts, blocked from a job site |
| Professional liability (errors and omissions) | No state mandate | Consultants, tech, design, and accounting firms, often by contract | Uncovered claims, lost contracts |
| Commercial property or a package policy | No state mandate | Anyone with a space, inventory, or equipment; landlords often require it | Out-of-pocket losses, lease default |
What business insurance costs in Maryland
These are illustrative annual ranges for small Maryland businesses, not quotes. Your real price depends on payroll, revenue, claims history, and the exact kind of work. Maryland workers comp prices have been trending down: as of mid-2026 the rating bureau NCCI has put through two straight cuts in its voluntary loss costs, the base rates that drive premiums, a 12.3 percent cut effective January 1, 2026 on top of a 13.2 percent cut that took effect January 1, 2025.
| Business type | Workers comp (est.) | General liability (est.) | Package policy (est.) |
|---|---|---|---|
| Office or professional services | 450 to 2,100 dollars | 500 to 1,800 dollars | 1,000 to 3,400 dollars |
| Restaurant or cafe | 2,300 to 9,000 dollars | 1,400 to 4,800 dollars | 3,800 to 13,000 dollars |
| Landscaper or small contractor | 3,000 to 12,500 dollars | 1,100 to 3,800 dollars | Usually separate policies |
| Cleaning or janitorial | 2,600 to 10,000 dollars | 800 to 3,000 dollars | Usually separate policies |
| Retail store | 1,000 to 4,600 dollars | 800 to 2,800 dollars | 2,000 to 7,500 dollars |
The 14 workers comp questions Maryland owners ask
Workers comp is where most of the confusion and most of the risk live, so we wrote a plain-English guide for every common situation. Start with the Maryland workers comp overview, then jump to the one that matches your business:
- I own an LLC
- I am a sole proprietor
- I own a corporation (C-corp or S-corp)
- We are a partnership
- We are a nonprofit
- My workers are 1099 contractors
- I only have part-time or seasonal staff
- I only employ family members
- My team is remote or out of state
- What happens if I do not have it
- How much it costs
- How to get it, even if I have been turned down
- What I need for a contractor license
A Baltimore example
Illustrative, not a quote. A general contractor in Baltimore runs the business as an LLC with one working member and two field employees, and regularly brings on a two-person framing subcontractor. Maryland requires coverage from the first employee, so the two field workers alone put the business well past the line, and the working member is covered by default too. When a builder they want to work for asks for proof of coverage, the LLC already has a policy and can produce a certificate the same day. Because a Maryland principal contractor can be made to pay comp for an uninsured subcontractor's injured worker, the owner also collects a certificate from every sub before they start. See the trade detail on our workers comp for general contractors page.
Real questions Maryland owners ask
Do I need workers comp for my Maryland business?
In almost every case, yes, as soon as you have one employee. Maryland requires coverage under the Workers' Compensation Act from your first covered employee, and it counts part-time, seasonal, family, and minor workers, plus working LLC members and corporate officers.
How many employees before workers comp is required in Maryland?
One. Maryland has no general head-count minimum, so a single covered employee triggers the requirement. The narrow exceptions are casual employees and some domestic and farm workers, not ordinary part-time or full-time staff.
Do I have to cover myself as the owner?
It depends on your setup, and Maryland cuts two ways. A sole proprietor or partner is out by default and can choose to opt in. A working LLC member or corporate officer is covered by default and can opt out only if they qualify, such as owning at least 20 percent.
Is general liability insurance required in Maryland?
The state does not make general liability mandatory for most businesses, but landlords, clients, and general contractors almost always require it before they will sign with you, so in practice you usually need it.
What happens if I skip required workers comp in Maryland?
The Workers' Compensation Commission can order you to get covered and pay a penalty of up to 25,000 dollars, with more if you do not comply. Going without is also a misdemeanor, and an injured worker can sue you with your usual defenses stripped away.
Does Maryland have a state workers comp fund?
Yes, but Maryland is not monopolistic. You can buy from any private carrier on the open market, and the state also runs Chesapeake Employers' Insurance Company, which competes for business and must cover eligible employers no one else will take.
I am based out of state with staff in Maryland. Do I need coverage here?
Usually yes, if the worker regularly works in Maryland. A policy from another state may not satisfy Maryland unless a reciprocity exception applies, so in most cases Maryland needs to be added or a separate policy written.
Why Maryland owners choose Morrow
- We shop the right market for you. In Maryland you buy workers' comp on the open market from any private insurer licensed in the state, and Maryland also runs a competitive state fund, Chesapeake Employers' Insurance Company, that both competes for ordinary business and must cover eligible employers no one else will take, so we can shop your rate widely and still have a guaranteed 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 Maryland guides
Every Maryland 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 Maryland (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?
- 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
- Maryland contractor workers comp
This guide is general information, not legal advice. Maryland rules and penalty amounts can change, so verify current requirements with the Maryland Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.