I Own a Vermont Corporation: Do I Need Comp?

If your business is a Vermont corporation, a C-corp or an S-corp, its executive officers are covered by workers compensation by default, the same as employees, and any non-owner employee must be covered too under 21 V.S.A. 687. That is the reverse of a sole proprietor: officers are in unless the corporation affirmatively excludes them. A corporation may elect to exclude up to four executive officers by filing Form 29 with the Department of Labor and getting its approval. Every actual employee, though, stays covered no matter what.

Who this is for: Owners, officers, and directors of a Vermont corporation, from a small S-corp with a few employees to a closely held company whose owners draw a salary.

The short version

A Vermont corporation's executive officers are covered by default, so they are on the policy unless excluded.
Any non-owner employee makes coverage mandatory, with no headcount threshold.
The corporation may elect to exclude up to four executive officers by filing Form 29 with the Department of Labor.
Regular W-2 employees are always covered; the exclusion choice applies only to executive officers.
The corporate form shields shareholders from many debts, but not from an injured worker without a policy.

How officers and employees are treated

Vermont counts executive officers as covered persons by default rather than leaving them out the way it leaves out a sole proprietor. So if your corporation has officers, they are treated like covered employees unless the corporation files to exclude them. The exclusion is capped at four executive officers, done on Form 29 through the agent and carrier, with the Department of Labor's approval. If you have five or more officers, at least one stays covered because only four can be excluded. Any non-owner employee triggers the mandate on its own and must be covered. Rank-and-file employees are never part of the exclusion choice; they are covered whenever the corporation is required to carry, which is any time it has a non-owner employee or an officer it has not excluded. Vermont does not treat construction officers differently here, so the up-to-four exclusion works the same in the trades.

Covered, excluded, or optional

Who or what	Coverage position	Notes
Executive officer	Covered by default	On the policy unless the corporation files Form 29 to exclude
Corporation with up to four officers, no other staff	Not required if all officers are excluded	Officers are in by default; exclude up to four to opt out
Corporation with five or more officers, no other staff	Yes	Only four can be excluded, so at least one officer stays covered
Corporation with any non-owner employee	Yes	A policy is mandatory under 21 V.S.A. 687
W-2 employee	Covered	Employees are always covered; they cannot be excluded

Why carrying a policy keeps you out of court

The corporate form shields shareholders from many business debts, but it does not by itself answer an injured worker. If the corporation carries no comp when required, an injured employee can drop out of the comp system and sue in civil court, where the uninsured employer loses the usual defenses that the worker was careless, knew the risk, or was hurt by a co-worker, and even carries the burden of proving it was not negligent. A prevailing worker can also recover costs, interest, and attorney's fees. Carrying a policy makes comp the employee's main remedy, which generally blocks that lawsuit. For a closely held corporation whose owners also work in the business, that protection often matters as much as the medical and wage benefits themselves.

A South Burlington example

Illustrative, not a quote. A South Burlington HVAC company is an S-corp with two owner-officers and six field technicians. Because it has non-owner employees, Vermont requires a policy, and the six technicians are covered. The two officers are covered by default; one runs the office and would rather keep her pay out of the premium, so the company files Form 29 to exclude her, while the other officer, who still goes out on service calls, stays on the policy to keep his own injuries covered. Vermont lets the company exclude up to four officers, so this choice is entirely theirs. When a technician falls from a ladder, the injury is covered and the company keeps its legal protection. The owners ask us to confirm the technicians are rated on the correct kind of work so the premium is not inflated. See our workers comp for HVAC contractors page.

Real questions Vermont owners ask

Does my Vermont corporation have to carry workers comp?

If it has any non-owner employee, yes. Its executive officers are also covered by default, so unless the corporation excludes them, they belong on a policy too. Up to four officers may be excluded on Form 29.

Am I covered as an owner-officer in Vermont?

Yes, by default. Vermont treats executive officers as covered unless the corporation files Form 29 to exclude them. That is the reverse of a sole proprietor, who is out unless they elect in.

Can I take myself off the policy as an officer?

Yes, within limits. The corporation can file Form 29 to exclude up to four executive officers, with the Department of Labor's approval. Beyond four, the remaining officers stay covered.

What if my corporation has more than four officers?

Then at least one officer stays covered. Vermont caps the exclusion at four executive officers, so a fifth or sixth officer cannot be left off and the corporation must carry a policy for them.

Are my regular employees covered if I have a policy?

Yes. W-2 employees are always covered by the corporate policy and cannot be excluded. The exclusion on Form 29 applies only to executive officers, not to rank-and-file staff.

Does incorporating protect me from an injured worker?

Not by itself. The corporate form shields shareholders from many debts, but an injured employee is a separate exposure. Without required comp, the corporation can be sued and loses its usual defenses.

Should I keep myself on the policy or file to exclude?

It depends on whether you want your own injuries covered. If you do hands-on work, staying on the policy protects you. If you mainly run the office, excluding yourself on Form 29 lowers the premium.

Why Vermont owners choose Morrow

We shop the right market for you. In Vermont you buy workers' comp on the open market from any private carrier licensed in the state, because there is no state fund, and if no carrier will take you the NCCI-run Vermont Workers' Compensation Insurance Plan (the assigned risk pool) is the guaranteed fallback, 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 Vermont guides

Every Vermont 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.

This guide is general information, not legal advice. Vermont rules and penalty amounts can change, so verify current requirements with Vermont Department of Labor, Workers' Compensation and Safety Division or a licensed advisor before you rely on them. Last updated: July 2026.