If you are a true sole proprietor in Maryland with no employees, you are not required to carry workers compensation on yourself. Maryland does not treat a sole proprietor as an employee of their own business, so covering yourself is optional. The moment you hire even one employee, though, that changes: Maryland requires coverage from the first covered employee, and part-time, seasonal, and family workers all count. So the answer depends entirely on whether anyone works for you.
Who this is for: Maryland sole proprietors, from a solo tradesperson or consultant with no staff to a proprietor about to make a first hire or bring on help for a busy season.
The short version
- A sole proprietor with no employees is not required to cover themselves in Maryland.
- You may elect to cover yourself, which pays your own on-the-job injuries through comp.
- Hiring one employee triggers the requirement, and part-time, seasonal, and family workers count.
- An election to cover yourself is made through the carrier and the Commission, not just by asking.
- General contractors and clients often want proof of coverage even from a solo operator.
You are out by default, but you can opt in
Maryland puts sole proprietors and partners on the opposite side of the line from working LLC members and corporate officers. As a sole proprietor you are out by default, meaning you do not have to insure yourself and a policy is not legally required until you have an employee. But you can choose to opt in and buy coverage on yourself, which many owners in physical trades do so that a serious on-the-job injury is paid by comp rather than coming out of pocket. That election is a positive step you make with the insurer, not something that happens automatically. If you do not elect coverage, your own injuries fall to your health insurance or a separate disability policy, and comp will not pay your lost income.
What changes when you hire
| Your situation | Is a policy required? | What to know |
|---|---|---|
| Just you, no employees | No | You may elect coverage on yourself; clients may still ask for proof |
| You plus one part-time helper | Yes | The helper is a covered employee from day one |
| You plus seasonal crew | Yes | Seasonal workers count; a true one-off casual worker is the narrow exception |
| You plus a family member on payroll | Yes | A relative who works for pay counts like any employee |
| You plus 1099 subcontractors | Often yes | A label does not decide it; a controlled worker is an employee, and an uninsured sub's injury can fall to you |
Why solo owners still buy coverage
Even when the law does not force it, two things push Maryland sole proprietors to carry comp. First, contracts: a general contractor or a client will often require proof of coverage before you can start, and buying a policy, sometimes on yourself alone, is the fastest way to satisfy that. Second, protection: if you do physical work, a policy on yourself pays your medical bills and part of your lost wages after an on-the-job injury, which no other single policy does as cleanly. If you hire, the calculation is no longer optional, because the first employee makes coverage a legal requirement, and going without exposes you to a Commission penalty of up to 25,000 dollars and a possible misdemeanor charge.
An Annapolis example
Illustrative, not a quote. An Annapolis house cleaner runs as a sole proprietor with no staff. She is not required to carry comp on herself, but a property manager she wants to work for asks for proof of coverage before adding her to their vendor list. She elects coverage on herself, which both satisfies the property manager and means a fall on the job would be paid by comp. A year later she hires a part-time helper, and from that helper's first day a policy is legally required, so she adds the employee to the same policy. We make sure her cleaning work is rated correctly so she is not overpaying. See our workers comp for cleaning and janitorial businesses page.
Real questions Maryland owners ask
Do I need workers comp as a Maryland sole proprietor?
Not on yourself, if you have no employees. Maryland does not treat a sole proprietor as their own employee, so covering yourself is optional until you hire someone.
When does a sole proprietor have to buy a policy?
As soon as you hire one covered employee. Maryland requires coverage from the first employee, and part-time, seasonal, and family workers all count toward that.
Can I cover myself as a sole proprietor if I want to?
Yes. You can elect coverage on yourself through the carrier, which pays your own on-the-job injuries through comp. Many owners in physical trades do this even though it is not required.
Do 1099 contractors count if I am a sole proprietor?
They can. A label does not settle it in Maryland, which uses a right-of-control test. If you direct the worker like an employee, they may count, and an uninsured sub's injury can fall to you.
Why would a client ask a solo owner for proof of coverage?
General contractors and property managers often require it to protect themselves. Buying a policy, sometimes on yourself alone, is the quickest way to satisfy that, and many will accept proof of your exempt status instead.
What happens if I hire and skip coverage?
You are exposed. Once you have an employee, going without is a violation that can bring a Commission penalty of up to 25,000 dollars, a misdemeanor charge, and a lawsuit from an injured worker without your normal defenses.
Does covering myself lower my taxes or liability?
No. Comp is about paying for injuries, not taxes, and it does not change your personal liability structure. It exists to cover medical bills and lost wages after an on-the-job injury.
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 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)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- Maryland cleaning 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.