North Carolina business owners with three or more employees must carry workers’ compensation insurance. Employees include temporary, part-time and seasonal workers as well as people who are unlawfully employed (such as minors or undocumented workers).

North Carolina does have a number of industry-specific exceptions to the three employee rule, which are outlined below.

Small Business Work Comp Requirements in North Carolina

You are required to carry workers’ compensation insurance in North Carolina you have three or more employees. However, the following situations are exceptions to this rule.

Agricultural employers: They do not have to carry workers’ compensation insurance unless they employ 10 or more full-time, non-seasonal workers.

Domestic servants: Any domestic servants directly employed by a household do not need to be covered by work comp.

Hazardous industries: If employees are exposed to radiation they must be covered by work comp, regardless of company size.

Trucking companies: Truck drivers must be covered by a workers’ compensation policy, even if the owner-operator is considered an independent contractor. The principal contractor can be held liable for the owner-operator, and their employees or subcontractors, in the event of injury or death.

A trucking company may obtain a blanket policy to cover all independent contractors and their employees or subcontractors.

Owners: Officers may need to be included, if employed by an incorporated business. Officers may waive their own coverage, but they still count toward the three or more employees rule.

North Carolina considers sole proprietors and partners to be employers and do not need to be covered. They can elect to be covered on their policy, if they want.

Contractors: A worker under direct control of the employer may be considered an employee, regardless of their tax status. Are you an employee or an independent contractor?

How to Buy Small Business Workers’ Compensation Insurance

North Carolina has a private market. You can purchase a workers’ compensation policy from any private insurance carrier or agency that is licensed to write in that state.

North Carolina does not have a state fund that competes with the private market. If you have trouble getting a policy, you can obtain coverage through the state’s assigned risk pool.

Coverage and Rates in North Carolina

The state upholds harsh penalties for workers’ compensation violations. Not having workers’ compensation insurance can carry a misdemeanor or even a felony charge.

While most states use the National Council on Compensation Insurance (NCCI) to collect workplace data and set rates, North Carolina uses its own rating bureau, North Carolina Rate Bureau. The non-profit, unincorporated organization collects loss, premium and payroll data, and recommends rates. Rates are set by class code, or industry.

This base rate is multiplied by company payroll, and then experience modifier and other discounts may be applied by an insurance carrier to calculate the final premium. The rating bureau also sets experience modification factors for employers.

North Carolina Work Comp Resources

• Regulated by: North Carolina Industrial Commission
• Rating bureau & assigned risk pool: North Carolina Rate Bureau (NCRB)

Here’s What You Need to Get Started

To buy workers compensation insurance, you need to request a quote from a licensed insurance agent and provide some details about your business.

Here’s what to have in front of you:

• Number of employees in each class code.
• Total payroll for all employees. You may be able to exclude yourself if you don’t wish to be covered under the policy.
• Federal ID Number. If you are a sole proprietor, you can use your Social Security Number.
• Copy of your workers comp insurance policy, if you’ve had coverage or claims in the past few years. If you know your company’s experience mod, please have your experience mod rating sheet or policy in front of you. Otherwise, you will be assigned a default rating of 1.0.

The information on this page has been interpreted and summarized for your convenience. Please consult your state’s governing authority for the most current and complete legislation.

Other Tips

If you employ workers in multiple states or your employees are temporarily working out-of-state, you need to purchase insurance for all the states where your workers are located, according to each state’s laws.

Call 704-341-2650 and let us walk you through it.

The nature of your business, number of employees being covered and past coverage and claims are all factors in how much your premium will cost.