If a South Carolina business that is required to carry workers compensation goes without it, the Workers Compensation Commission can fine it 10 to 100 dollars for every day it stays uninsured, plus 1 dollar per employee, and the fine keeps running until coverage is in force. The bigger risk comes if a worker is hurt: you lose the legal defenses you would normally have, and the worker can either claim comp or sue you at law.
Who this is for: South Carolina owners weighing the real cost of skipping required coverage, or catching up after a lapse.
The short version
- The fine runs by the day. Going without required coverage draws 10 to 100 dollars per day, plus 1 dollar per employee (Section 42-5-40).
- It is a civil fine, not a crime. Simple failure to insure is not a misdemeanor in South Carolina; fraud is what carries criminal exposure.
- You lose your legal defenses. An uninsured employer sued at law cannot raise the usual common-law defenses.
- The worker chooses. A hurt worker can take comp or sue you at law, where damages are not capped.
- No stop-work order, but the fine and the lawsuit exposure are enough to dwarf a premium.
What the penalties look like
South Carolina's enforcement is less about a single big fine and more about a daily meter plus a stripped-down legal position if someone is hurt. Here is how the pieces stack up.
| Consequence | Amount or effect | Source |
|---|---|---|
| Daily fine for failure to insure | 10 to 100 dollars per day it continues, plus 1 dollar per employee | Section 42-5-40 |
| Loss of legal defenses in a lawsuit | Cannot argue worker fault, coworker fault, or assumed risk | Section 42-1-510 and 42-5-40 |
| Injured worker's choice | Worker may claim comp or sue you at law | Section 42-5-40 |
| You lose your legal shield | A covered employer can only be taken through the comp system; drop the coverage you owed and an injured worker can sue you in regular court instead | Section 42-1-540 |
| General contractor exposure | You can owe comp to an uninsured sub's injured worker | Section 42-1-410 |
Losing your defenses is the real danger
The daily fine gets attention, but the loss of legal defenses is what turns a single injury into a business-ending event. A covered employer enjoys what the law calls the exclusive remedy: an injured worker goes through the comp system and cannot sue for extra damages. Drop the coverage you were required to carry, and that shield falls away. The worker can sue you in regular court, and you are barred from arguing the injury was partly their own fault, that a coworker caused it, or that they accepted the risk of the job. A serious injury verdict in that setting can be many times what a policy would have cost.
A word on stop-work orders and jail
Some states hand out stop-work orders or treat a coverage lapse as a crime. South Carolina's workers comp law does neither for a simple failure to insure. The daily fine is civil, assessed by the Commission after a hearing, and there is no stop-work order in the statute for going uninsured. Criminal exposure is reserved for fraud, such as lying about having coverage. That does not make going without safe, because the daily fine and the loss of your defenses do the heavy lifting, but it does mean you should ignore online claims that South Carolina jails owners for a bare lapse.
A Greenwood example
Illustrative, not a quote. A Greenwood roofing company with five crew skips coverage to save money. A complaint brings it to the Commission's attention, and the daily fine starts running for each day it stayed uninsured. Then a roofer falls and is badly hurt. Because the company was required to carry coverage and did not, the worker sues at law, and the company cannot argue the roofer was careless or assumed the risk. The verdict and the accumulated fine together dwarf what a policy would have cost. See our workers comp for roofers page.
Real questions South Carolina owners ask
What is the penalty for not having workers comp in South Carolina?
The Workers Compensation Commission can fine an uninsured employer 10 to 100 dollars for each day it goes without coverage, plus 1 dollar per employee, and the fine keeps running until you get covered.
Can I go to jail for not carrying workers comp in South Carolina?
Simple failure to insure is a civil fine in South Carolina, not a crime. Criminal exposure attaches to fraud and false statements about coverage, not to the bare failure to carry it.
What happens if a worker is hurt and I have no coverage?
You lose your usual legal defenses. The injured worker can either claim comp or sue you at law, and in that lawsuit you cannot argue the injury was partly the worker's fault or a coworker's fault.
Does South Carolina issue stop-work orders for no coverage?
The workers comp law does not provide a stop-work order for failing to insure. Enforcement runs through the daily fine and, most importantly, the loss of your legal defenses in an injury lawsuit.
What legal defenses do I lose by going uninsured?
The three common-law defenses: that the worker was partly at fault, that a coworker caused it, and that the worker accepted the risk of the job. An uninsured employer sued at law cannot raise any of them.
Can I be sued in regular court instead of the comp system?
Yes. If you were required to carry coverage and did not, the injured worker gets to choose between the comp system and a lawsuit at law, where damages are not capped the way comp benefits are.
How do I fix a coverage lapse?
Get a policy in force right away and talk with an agent about the gap. The daily fine and your exposure both keep growing the longer you go without coverage, so speed matters.
Why South Carolina owners choose Morrow
- We shop the right market for you. In South Carolina you buy workers comp on the open market from any private insurer licensed in the state, because South Carolina has no state fund. If no carrier will take you, the NCCI-run assigned risk plan is the guaranteed fallback, and larger employers can apply to self-insure with approval from the state. We shop the licensed carriers so you are not stuck paying the fallback plan's higher rate.
- 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 South Carolina guides
Every South 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 South 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 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?
- 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)
- Workers comp vs employers liability
- What workers comp does not cover
- South Carolina roofer workers comp
This guide is general information, not legal advice. South Carolina rules and penalty amounts can change, so verify current requirements with South Carolina Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.