If your Maryland corporation has even one covered employee, yes, it must carry workers compensation, and that includes officers who work for pay. Maryland treats an officer who provides a service to the corporation for money as a covered employee by default, so a working owner-officer is normally on the policy. An officer can opt out only through one of a few narrow paths, such as being an officer of a close corporation or owning at least 20 percent in certain corporations. So the question turns on whether anyone works for the company and whether each officer qualifies to opt out.
Who this is for: Owners and officers of a Maryland C-corporation or S-corporation, from a single-owner corporation with no other staff to a corporation running a full payroll.
The short version
- A corporation must carry workers comp once it has one covered employee.
- An officer who works for the corporation for pay is a covered employee by default.
- Opting out is narrow: it is open to close-corporation officers, a limited number of officers of other corporations, and certain farm or professional corporation officers who own at least 20 percent.
- An opt-out is not effective until the corporation gives written notice naming the officer to both the Commission and the insurer.
- Non-owner employees are covered from the first hire no matter how officers are treated.
How Maryland treats corporate officers
An officer who does real work for pay is a covered employee in Maryland, the same default that applies to working LLC members. That is the opposite of the sole-proprietor and partner rules, so an owner who incorporates should not assume they drop off the coverage requirement. Maryland does allow an officer to opt out, but only through specific routes: an officer of a close corporation can elect out; among officers of another corporation, no more than five of them may elect out; an officer of a corporation that earns at least 75 percent of its income from farming can elect out if they own at least 20 percent of the stock; and an officer of a professional corporation can elect out if they own at least 20 percent of the stock and perform professional services. If your officer does not fit one of those, they stay covered. And as with every Maryland owner election, an opt-out only takes effect once the corporation delivers written notice naming the officer to both the Commission and the insurer.
Which officers can opt out
| Officer situation | Can they opt out? | Condition |
|---|---|---|
| Officer of a close corporation | Yes | Available by the corporation's status |
| Officer of an ordinary corporation | Limited | No more than five officers may elect out |
| Officer of a mostly-farm corporation | Yes | Must earn at least 75 percent of income from farming and own at least 20 percent of stock |
| Officer of a professional corporation | Yes | Must own at least 20 percent of stock and perform professional services |
| Any other working officer | No | Covered by default as an employee |
Officers versus the rest of your staff
Two separate questions decide whether your corporation needs a policy. The first is your officers, handled by the default-in rule and the narrow opt-outs above. The second is everyone else: the moment the corporation has any other employee, part-time or full-time, it needs coverage, full stop. Many owner-officers who could technically opt out choose to stay covered, because if they do physical or field work a policy pays their own injuries, and because they already need a policy for their staff anyway. The corporate form protects your personal assets from many business debts, but it does not answer an injured employee, which is what comp does.
A Frederick example
Illustrative, not a quote. A Frederick manufacturing business is set up as an S-corporation with two owner-officers who run the shop floor and four line workers. Maryland treats the two working officers as covered employees, and the four line workers plainly need coverage, so the corporation carries a policy. The officers could look at opting out, but because they work on the floor and could be injured by machinery, they stay on the policy so their own injuries are covered. When a wholesale customer asks for proof of coverage, the corporation produces a certificate the same day, and we make sure the manufacturing payroll is rated on the right categories so the price is fair. See our workers comp for manufacturers page.
Real questions Maryland owners ask
Does my Maryland corporation need workers comp?
Once it has one covered employee, yes, and that includes officers who work for pay. Maryland treats a working officer as a covered employee by default, so an owner-officer is normally on the policy.
Am I covered as a corporate officer in Maryland?
By default, yes, if you provide a service to the corporation for money. You are treated as a covered employee unless you qualify for one of a few narrow opt-out paths and file the required notice.
Can I opt out as an owner-officer?
Only through a specific route: a close-corporation officer, one of no more than five officers of another corporation, or a farm or professional corporation officer who owns at least 20 percent of the stock.
Does an S-corp owner need to be covered in Maryland?
If you work for the corporation for pay, you are covered by default whether it is an S-corp or a C-corp. The tax election does not change the workers comp treatment; the work you do for pay does.
Is leaving an officer off the policy enough to exempt them?
No. An opt-out only takes effect after the corporation files written notice naming the officer with both the Workers' Compensation Commission and the insurer. Simply omitting them does not work.
Do I still need a policy for my other employees?
Yes. Apart from the officers, the corporation needs coverage the moment it has any other employee, part-time or full-time. That requirement stands no matter how the officers are treated.
Should I opt out to save money?
Often it is not worth it if you do hands-on work, because opting out leaves your own injuries uncovered by comp. Many owner-officers stay on the policy, especially since they need it for staff anyway.
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?
- 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)
- Workers comp vs employers liability
- What workers comp does not cover
- Maryland manufacturer 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.