If your New York LLC has even one employee who is not a member, yes, the LLC needs workers compensation for that person, and it has to be in place before their first shift. The members who own the LLC are a different story: New York automatically leaves LLC and LLP members out of the business's own coverage, though you can choose to cover yourselves.
Who this is for: Owners of a New York limited liability company (LLC) or limited liability partnership (LLP) who want to know whether the business must carry workers comp and whether the members themselves are covered. Workers comp is the insurance that pays medical bills and part of lost wages when an employee is hurt on the job.
The short version
- Members: LLC and LLP members are automatically excluded from the LLC's own workers comp, the same way partners and sole proprietors are.
- Employees: any non-member employee, full-time or part-time, must be covered from the first hire.
- Opting in: a member who wants coverage for themselves files Form C-105.32 with the insurer.
- No employees at all: a member-only LLC with no other workers is generally not required to carry a policy.
- Proof: a member-only LLC with no staff can file Form CE-200 to attest it is exempt, but only for a government license, permit, or contract office. A private client or general contractor cannot accept a CE-200, so for them you would carry a policy to produce a certificate.
Are LLC members covered, or just employees?
New York treats the people who own an LLC very differently from the people the LLC hires. Members are considered owners, not employees, so they sit outside the policy unless they opt in. Everyone the LLC pays as a worker sits inside it.
| Person | Covered by default? | How to change it |
|---|---|---|
| LLC or LLP member (owner) | No, excluded by default | Elect in with Form C-105.32 |
| Non-member employee (full-time) | Yes, must be covered | Cannot be waived |
| Non-member employee (part-time or seasonal) | Yes, must be covered | No hours minimum |
| 1099 worker who is really an employee | Yes, must be covered | Turns on the right-of-control test |
| Family member on the payroll | Yes, must be covered | No general family exemption |
When does my LLC have to buy a policy?
The dividing line is simple: do you pay anyone who is not a member? If yes, you need a policy for those workers before they start. If your LLC is just its members with no other staff, New York does not require you to carry coverage, although members can still elect in for their own protection, since a member's own injury is otherwise not covered by anything.
Two traps catch New York LLCs. First, calling a worker a 1099 contractor does not settle the question: if you control how and when they work, New York usually treats them as an employee who must be covered. See 1099 workers. Second, in construction the test is stricter, and a general contractor can be held liable for an uninsured subcontractor's injured worker.
What if members want to be covered too?
Some members choose to include themselves, especially in trades where the members do physical work alongside the crew. To do that, the member files Form C-105.32 (the notice that brings partners or self-employed people under the coverage of the law) with the insurer, and the member's pay is then rated into the premium.
A quick New York example
Illustrative, not a quote. Two friends run a small remodeling business in Queens as a two-member LLC and hire one full-time carpenter. The two members are excluded from the policy by default, but the carpenter must be covered from day one, and in construction New York offers no lower threshold. Because the members swing hammers themselves, they each file Form C-105.32 to opt in, so a fall from a ladder is covered for them too. When the carpenter later strains his back lifting sheetrock, the policy pays his treatment and lost wages, and the members owe nothing on the claim. Skipping coverage would have risked a stop-work order and, on a job for a larger general contractor, loss of the contract.
Real questions New York owners ask
I have a single-member LLC in New York with no employees. Do I need workers comp?
Generally no. A member-only LLC with no other workers is not required to carry a policy. You can still elect coverage for yourself with Form C-105.32, since your own injury is otherwise not covered.
I added one employee to my LLC. What changes?
You now need a workers comp policy for that employee before their first shift. The members stay excluded by default, but the new hire must be covered, and there is no part-time exception.
Can the LLC members choose to cover themselves?
Yes. A member who wants coverage files Form C-105.32 with the insurer, and their pay is then included in the premium calculation. This is common in trades where members do physical work.
My LLC only pays 1099 subcontractors. Am I off the hook?
Not automatically. If you control how the work is done, New York usually treats those workers as employees who must be covered. In construction the test is stricter, so many subcontractors count as employees.
Does my LLC being liability-protected mean I do not need workers comp?
No. The liability shield of an LLC protects your personal assets from business debts, but it does not remove the legal duty to carry workers comp for employees. Those are separate things.
A general contractor is asking for proof of coverage before I start. What do I send?
If you carry a policy, we send a certificate showing your coverage the same business day for most carriers. A general contractor cannot accept Form CE-200, because that form is only for a government license, permit, or contract office. If your LLC has no employees, you would either carry a policy, often a minimal one, to produce a certificate, or the contractor agrees to take you on without it.
Are family members who work in my LLC covered?
Yes. New York has no general family exemption for a for-profit business, so a family member on the payroll must be covered like any other employee.
Why New York owners choose Morrow
- We shop the right market for you. New York is an open, competitive market: you can buy coverage from any private carrier the state authorizes or from the state-run New York State Insurance Fund (NYSIF), so Morrow shops multiple insurers to find the best fit instead of leaving you with a single option.
- 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 New York guides
Every New York 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 New York (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?
- What workers comp does not cover
- Contractor workers comp in New York
This guide is general information, not legal advice. New York rules and penalty amounts can change, so verify current requirements with New York State Workers' Compensation Board or a licensed advisor before you rely on them. Last updated: July 2026.