A North Carolina LLC needs workers compensation once it has three or more employees regularly employed in the business. The members who own the LLC are left out by default and generally do not count toward the three, so the test is about the people you hire, not the owners.
Who this is for: North Carolina LLC owners, single-member or multi-member, deciding whether they must carry workers comp and whether to cover themselves.
The short version
- Members are out by default. An LLC member is not automatically an employee under the North Carolina Act, so members do not count toward the three unless they opt in.
- The count is about employees. Once three or more employees are regularly employed, the LLC must carry coverage (G.S. 97-2).
- Members can opt in. A member active in the business can elect to be covered by telling the insurer; there is no separate state form.
- Radiation work needs it at one. If the work involves radiation, coverage is required at a single employee.
- Contracts may require it sooner. A general contractor or landlord can demand proof of coverage even when the state does not.
How North Carolina treats LLC members
The Act names LLC members directly. A member may elect to be included as an employee if he or she is active in the business and the insurer is notified. Until that election, the member is not an employee, gets no benefits, and does not count toward the three. This is the opposite of how corporate officers are treated, who are covered unless they opt out. Electing in means you gain benefits if you are hurt, but your own pay then counts for pricing.
| Situation | Must the LLC carry comp? |
|---|---|
| Two members, no employees | No, unless a member opts in or the work involves radiation |
| One member, three employees | Yes |
| Two members, one employee | No, the lone employee is under the three-employee rule |
| Any size doing radiation work | Yes, at one employee |
Should members opt in?
Covering yourself means your medical bills and lost wages from a work injury are paid by the policy, which health plans often will not cover for on-the-job harm. The tradeoff is added premium, since your pay goes into the calculation. Many working owners in the trades opt in; many office-based owners do not. When you add an employee that pushes you to three, the decision matters more, because you are buying a policy anyway.
A Raleigh example
Illustrative, not a quote. A Raleigh design-build LLC has two members and hires its third field employee. The three employees make coverage mandatory. The two members are not counted and are not covered unless each tells the insurer they want in. One member who swings a hammer on site opts in; the other, who runs the office, stays out. See our contractor workers comp page.
Real questions North Carolina owners ask
Does my North Carolina LLC need workers comp?
Once the LLC has three or more employees regularly employed, yes. The members who own it are not counted by default, so the test is about the people you hire.
Do LLC members count toward the three-employee rule?
No, not by default. A North Carolina LLC member is not automatically an employee, so members do not count unless they opt in with the insurer.
Can an LLC member get covered?
Yes. A member active in the business can elect to be included by notifying the insurer. There is no separate state form to file.
Does a single-member LLC with no employees need it?
Generally no, unless the member opts in or the work involves radiation. The state mandate starts at three employees.
Is this the same as how corporations work?
No, it is the opposite. LLC members are out by default and opt in; corporate officers are in by default and opt out.
Why would an LLC member opt in?
To have work injuries paid by the policy, since a health plan may deny an on-the-job injury. The tradeoff is added premium based on the member's pay.
Why North Carolina owners choose Morrow
- We shop the right market for you. In North Carolina you buy workers comp on the open market from any private insurer licensed in the state, because North Carolina has no state fund, and if no carrier will take you the North Carolina Rate Bureau runs a guaranteed fallback plan, so we can shop your rate freely and still have a backstop 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 North Carolina guides
Every North Carolina 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 North Carolina (start here)
- Workers comp: the owner's overview
- 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)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- North Carolina contractor workers comp
This guide is general information, not legal advice. North Carolina rules and penalty amounts can change, so verify current requirements with North Carolina Industrial Commission or a licensed advisor before you rely on them. Last updated: July 2026.