A North Carolina partnership needs workers compensation once it has three or more employees regularly employed. The partners themselves are left out by default and generally do not count toward the three, so the test turns on the people you hire.
Who this is for: North Carolina partnerships and their partners deciding whether they must carry coverage and whether to cover themselves.
The short version
- Partners are out by default. A partner is not automatically an employee under the North Carolina Act.
- Partners usually do not count. Because they are not employees by default, partners generally do not count toward the three.
- Employees trigger the rule. Three or more regularly employed workers make coverage mandatory (G.S. 97-2).
- Partners can opt in. A partner active in the business can elect to be covered by notifying the insurer.
- Radiation work is the exception. Coverage is required at one employee if the work involves radiation.
How partners are treated
The Act lets a partner active in the business elect to be included as an employee by notifying the insurer. Until then, a partner is not an employee, is not covered, and does not count toward the three-employee test. Your employees are what put you over the line. This mirrors the rule for sole proprietors and LLC members, and it is the opposite of corporate officers, who are covered unless they opt out.
| Situation | Required by North Carolina? |
|---|---|
| Two partners, no employees | No, unless a partner opts in or the work involves radiation |
| Two partners, two employees | No, under the three-employee rule |
| Two partners, three employees | Yes |
| Any size doing radiation work | Yes, at one employee |
Should a partner opt in?
Opting in means a work injury to that partner is paid by the policy instead of falling on a health plan that may deny it. The cost is added premium based on the partner's pay. Partners in physical trades often opt in; partners in low-risk office work often do not. Once you have three employees and must buy a policy anyway, adding or leaving off the partners is a smaller decision.
A Winston-Salem example
Illustrative, not a quote. A Winston-Salem accounting partnership has two partners and four staff bookkeepers. The four employees pass the three-employee trigger, so the firm must carry coverage. The two partners are not counted and are not covered unless each notifies the insurer. Both stay out, since their risk of a work injury is low. See our accounting firm workers comp page.
Real questions North Carolina owners ask
Does my North Carolina partnership need workers comp?
Once the firm has three or more employees regularly employed, yes. The partners are not counted by default, so the test turns on the people you hire.
Do partners count toward the three?
No, not by default. A partner is not automatically an employee under the North Carolina Act, so partners generally do not count unless they opt in.
Can a partner be covered?
Yes. A partner active in the business can elect to be included by notifying the insurer. There is no separate state form.
Two partners and one employee, do we need it?
No. One employee is under the three-employee trigger. You would need coverage at three employees, or at one if the work involves radiation.
Is this different from a corporation?
Yes. Partners are out by default and opt in, while corporate officers are in by default and opt out.
Why would a partner opt in?
To have a work injury paid by the policy rather than risk a health-plan denial. The tradeoff is added premium based on the partner'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 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 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 accounting firm 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.