If you skip required workers compensation in Maryland, the exposure is serious and comes on several fronts. The Workers' Compensation Commission can order you to get covered and pay a civil penalty of up to 25,000 dollars to the Uninsured Employers' Fund, with a further penalty of up to 25,000 dollars if you still do not comply in time. Going without required coverage is also a misdemeanor, and an uninsured employer loses the legal shield that normally keeps comp a worker's only remedy, so an injured worker can sue. These stack, and the people who run the company can be on the hook personally.
Who this is for: Maryland owners weighing the risk of going without, or trying to understand what they face after a lapse or a missed renewal.
The short version
- The Commission can order coverage and a penalty of up to 25,000 dollars, plus up to another 25,000 dollars for continued non-compliance.
- Going without required coverage is a misdemeanor, punishable by a fine of up to 5,000 dollars or up to a year in jail.
- An officer or managing member who knowingly fails to insure can be personally on the hook.
- An uninsured employer loses its usual defenses, so an injured worker can either claim comp or sue.
- If you cannot pay an injured worker, the state's Uninsured Employers' Fund may step in and then pursue you.
The civil and criminal penalties
Maryland runs two separate penalty tracks, and it helps to keep the numbers straight. On the civil side, after a hearing on why you should not be penalized, the Commission can order you to secure coverage and pay up to 25,000 dollars to the Uninsured Employers' Fund, an amount raised from a lower cap in 2024. Fail to comply within 30 days and the Commission can add up to another 25,000 dollars. On the criminal side, failing to secure required coverage is a misdemeanor that can bring a fine of up to 5,000 dollars, up to a year in jail, or both.
| Consequence | What it is | How bad |
|---|---|---|
| Commission civil penalty | Order to get covered plus a fine to the Uninsured Employers' Fund | Up to 25,000 dollars, plus up to 25,000 dollars more for non-compliance |
| Criminal charge | Misdemeanor for failing to secure coverage | Up to 5,000 dollars, up to a year in jail, or both |
| Personal liability | Officer or managing member who knowingly failed to insure | Personally responsible for the full penalty, even if the business can't pay |
| Loss of defenses | Worker can sue instead of claiming comp | You cannot argue the worker assumed the risk or was careless |
| Uninsured Employers' Fund | Fund pays an unpaid worker, then pursues you | You still owe the money, now to the state |
The lawsuit risk is the real sting
For many owners the penalty is not the worst part. When an employer carries comp, an injured worker's claim goes through the comp system and the employer is protected from being sued over the injury. When the employer failed to secure coverage, Maryland strips that protection: the injured worker, or their family in a death case, can either file a comp claim or bring a lawsuit for damages, and in that lawsuit the employer cannot argue that the worker assumed the risk, was partly at fault, or was hurt by a co-worker. Those defenses are exactly the ones employers normally rely on, so an uninsured injury can turn into an open-ended court judgment. And if the business cannot pay, the state's Uninsured Employers' Fund may cover the worker and then come after the business and, where an officer knowingly went without coverage, after that person individually.
A Prince George's County example
Illustrative, not a quote. A small Prince George's County contractor lets its workers comp lapse to save money over a slow winter. In February a worker falls from a ladder and is seriously hurt. Because the business was uninsured, the Commission can order it to get covered and pay a penalty, the worker can sue without the contractor's usual defenses, and the owner who knowingly skipped coverage can be personally liable. What would have been a routine comp claim becomes a penalty, a lawsuit, and a personal exposure. We help contractors keep continuous coverage and avoid exactly this gap. See our workers comp for plumbers and trade contractors page.
Real questions Maryland owners ask
What is the penalty for no workers comp in Maryland?
The Commission can order you to get covered and pay up to 25,000 dollars to the Uninsured Employers' Fund, with up to another 25,000 dollars if you still do not comply. Going without is also a misdemeanor.
Can I go to jail for not carrying workers comp?
It is possible. Failing to secure required coverage is a misdemeanor in Maryland, punishable by a fine of up to 5,000 dollars, up to a year in jail, or both, separate from the civil penalty.
Can I be held personally liable as an owner?
Yes. If an officer or managing member knowingly failed to insure, that person can be held personally responsible for the full penalty, even if the business can't pay it.
Can an injured worker sue me if I had no coverage?
Yes. An uninsured employer loses the shield that makes comp a worker's only remedy, so the worker can sue for damages, and you cannot argue they assumed the risk, were careless, or were hurt by a co-worker.
What is the Uninsured Employers' Fund?
It is a state fund that can pay an injured worker when an uninsured employer does not, and then pursues the employer to recover the money. So going without does not make the cost disappear; it moves it.
Does Maryland issue stop-work orders for this?
Maryland's main levers are the Commission's order to get covered plus escalating penalties, criminal charges, and pressure on business licenses. Rather than rely on any single tool, assume the state can force compliance and add cost.
What should I do if my coverage lapsed?
Fix it fast. Get a policy back in force right away to stop the exposure from growing, and reach out for help, because the risk climbs sharply the moment anyone is hurt while you are uncovered.
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?
- 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)
- What workers comp does not cover
- Workers comp vs employers liability
- Maryland plumber 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.