If your Maine nonprofit has any paid employees, yes, it must carry workers compensation insurance from the first one under 39-A M.R.S. section 401. Being a tax-exempt charity does not change the rule; a nonprofit is an employer like any other. Maine adds one twist for nonprofits: a duly elected or appointed executive officer of a charitable, religious, educational, or other nonprofit corporation is not covered unless the nonprofit specifically includes them, which is the mirror image of how for-profit officers are treated.
Who this is for: Directors and operators of Maine nonprofits, from an all-volunteer group to a charity with paid program and administrative staff.
The short version
- A Maine nonprofit with even one paid employee must carry workers comp; there is no headcount minimum.
- Tax-exempt status does not change this; the requirement applies to nonprofits like any employer.
- Nonprofit executive officers are not covered by default unless the organization specifically includes them.
- People whose service is genuinely voluntary are generally not employees who trigger the rule.
- Grants, government contracts, and building leases frequently require proof of coverage on top of the law.
Employees, officers, and volunteers
Workers comp covers employees, so the first question for a nonprofit is who is actually on payroll. An all-volunteer organization frequently has no employees to insure. Once the nonprofit hires paid staff, coverage is required from the first employee, the same as for a for-profit business. The wrinkle is the officers: while a for-profit corporation covers its executive officers by default, a nonprofit's elected or appointed executive officers are left out unless the nonprofit chooses to include them. So a charity often decides on purpose whether to add its officers to the policy, rather than getting them by default.
What drives coverage for a nonprofit
| Situation | Is comp required? | Notes |
|---|---|---|
| All-volunteer, no paid staff | Usually no | Genuine volunteers are generally not employees |
| Any paid program or admin staff | Yes | Required from the first paid employee |
| Nonprofit executive officers | Not covered by default | Covered only if the organization specifically includes them |
| Receives a government grant or contract | Yes if staffed, plus a funder requirement | Funders commonly require proof of coverage on top of the law |
The risk of going without
A nonprofit that skips required coverage faces the same enforcement as any Maine employer. If a paid employee is injured and the organization carries no comp, the state can charge a penalty of up to 10,000 dollars, or 108 percent of the premium it should have paid, whichever is larger, and the worker can sue once the nonprofit loses its exclusive-remedy protection. A judgment there comes straight out of the mission's budget, and the person responsible for getting coverage can face personal exposure. Carrying comp makes it the employee's exclusive remedy and generally blocks the lawsuit, which is why a nonprofit with paid staff always insures them.
A Waterville example
Illustrative, not a quote. A Waterville youth-services nonprofit runs mostly on volunteers but employs two paid program coordinators. Because those coordinators are employees, Maine requires coverage for them, and a city grant separately requires proof of it, so the nonprofit buys a policy. The board decides to specifically include its two executive officers as well, since they run programs in person. When a coordinator trips carrying supplies at an event, comp pays the medical bills and the nonprofit keeps its exclusive-remedy protection instead of facing a claim against its grant-funded budget. We help the organization rate its clerical and program payroll correctly so the premium fits a small staff. See our workers comp for nonprofits page.
Real questions Maine owners ask
Does my Maine nonprofit have to carry workers comp?
If it has any paid employees, yes, from the first one. A nonprofit is an employer like any other. An all-volunteer group with no paid staff usually has no one it is required to cover.
Does tax-exempt status change the workers comp rules?
No. Being a tax-exempt nonprofit does not change the requirement. A charity with paid staff must carry coverage on the same first-employee basis as a for-profit business.
Are our nonprofit officers covered automatically?
No, and this is where nonprofits differ. Maine leaves a nonprofit's elected or appointed executive officers out of coverage unless the organization specifically includes them on the policy.
Do we need comp if we only have volunteers?
Usually not. Genuine volunteers are generally not employees, so an all-volunteer group often has no one for comp to cover. Once you pay staff, the requirement applies from the first paid worker.
Can we cover our volunteers with workers comp?
Generally not, because comp covers employees. To protect volunteers, nonprofits usually add separate coverage, such as volunteer accident insurance, rather than relying on a workers comp policy.
Why do grants require workers comp?
Funders and government contracts require proof of coverage to protect themselves and the people the program serves. In Maine a nonprofit with paid staff already needs it by law, and the grant confirms it.
What happens if our nonprofit skips coverage and a staffer is hurt?
The organization can face a penalty of up to 10,000 dollars or 108 percent of the premium owed, be sued once it loses exclusive-remedy protection, and see the person responsible for coverage held personally liable.
Why Maine owners choose Morrow
- We shop the right market for you. In Maine you buy workers' comp on the open market from any carrier licensed in the state, with the state-created MEMIC competing alongside private insurers and also standing as the guaranteed insurer of last resort, so we can shop your price freely and still have a fallback if you are hard to place.
- 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 Maine guides
Every Maine 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 Maine (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
- Maine nonprofit workers comp
This guide is general information, not legal advice. Maine rules and penalty amounts can change, so verify current requirements with Maine Workers' Compensation Board (WCB) or a licensed advisor before you rely on them. Last updated: July 2026.