If your South Carolina partnership regularly employs four or more people whose prior-year wages totaled at least 3,000 dollars, yes, it needs workers compensation. With fewer than four people it is exempt no matter how large its payroll is. The partners themselves are left out of the partnership's own coverage by default, the same as a sole proprietor, and each partner has to opt in to be covered.
Who this is for: South Carolina partnerships, from a two-person professional firm to a partnership running a payroll of employees.
The short version
- Partners are left out by default. A partner is not on the partnership's policy unless the partner opts in.
- Four or more people means a policy is required (Section 42-1-360). Fewer than four is exempt regardless of payroll; the 3,000 dollar payroll figure is a second exemption, not a trigger.
- Partners opt in through the insurer. An active partner elects to be included by having the firm notify its carrier.
- Employees are always covered from day one once the partnership is subject.
- Partners still count toward the four-employee test even while opted out of coverage.
How partners are treated
South Carolina treats a partner like a sole proprietor: out of the business's own coverage by default, with the option to be included. A partner who wants their own injuries paid by the policy elects to be covered, and that election runs through the insurer, meaning the firm notifies its carrier that the partner, who must be actively engaged in the business, is opting in. Nothing about being a partnership changes the duty to cover the firm's employees. The moment the firm is subject, every employee is on the policy from their first day, and the partners decide separately whether to be on it too.
What applies to your partnership
| Your setup | Is comp required? | What partners and staff should know |
|---|---|---|
| Two or three partners, no staff | No | Fewer than four people is exempt regardless of payroll; partners are out of coverage by default |
| Partners plus employees reaching four total | Yes | Employees covered from day one; partners may opt in through the insurer |
| Four or more people, wages under 3,000 dollars last year | No | The rare case the second, payroll exemption also excuses |
| Four or more working partners | Yes | Subject at four; each partner is out of coverage unless they opt in |
Deciding whether partners opt in
Opting in puts a partner's own on-the-job injuries on the policy. That matters most for partners who do physical or field work, where an injury is a real possibility. Partners in a desk-based firm often stay out and rely on personal health and disability coverage, since their injury risk at work is low. The employees are a separate question with a clear answer: once the firm is subject, they must be covered, full stop. We help partners weigh their own election against the cost and against what their clients and contracts require.
A Charleston example
Illustrative, not a quote. A Charleston accounting partnership has two partners and hires two staff during tax season, reaching four people in the business. That makes the firm subject, so both staff are covered from day one. The two partners work at desks and face little injury risk, so they leave themselves out of coverage and rely on their personal health plans, keeping their draw out of the premium. When the building landlord asks for proof of coverage, the firm produces a certificate the same day. See our workers comp for accountants and bookkeepers page.
Real questions South Carolina owners ask
Does my South Carolina partnership need workers comp?
Only once the partnership regularly employs four or more people whose prior-year wages totaled at least 3,000 dollars. With fewer than four it is exempt regardless of payroll. Partners themselves are left out of coverage by default.
Are partners covered by default in South Carolina?
No. A partner is left out of the partnership's own coverage by default, the same as a sole proprietor. A partner who wants coverage opts in by having the firm notify its insurer.
How do partners opt into coverage?
The partnership notifies its workers comp insurer that a partner, who is active in the business, elects to be included. The election runs through the carrier, not a state form.
Do our employees get covered even if partners opt out?
Yes. Once the partnership is subject, every employee is covered from day one. Partner elections only decide whether the partners themselves are on the policy.
Do partners count toward the four employees?
Working partners who are active in the business generally count in the headcount even though they are out of coverage by default. Confirm borderline cases with the Commission.
Does a two-partner firm with no staff need a policy?
Not by state law, because two is below four and a business with fewer than four people is exempt regardless of payroll. Partners are out of coverage by default, so a two-partner firm owes nothing until it adds a fourth person.
Why would a partner opt into coverage?
So the partner's own on-the-job injuries are paid by the policy. Without opting in, an injured partner relies on personal health and disability coverage instead.
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 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
- South Carolina accounting firm 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.