Who needs workers’ compensation insurance in Maryland?

For most businesses, the rule is straightforward: if you have employees, you need workers’ compensation coverage. Maryland’s Workers’ Compensation Commission explains that, with a few exceptions, every employer in Maryland with one or more employees is required by law to provide workers’ comp coverage.

Common “do we count?” scenarios

Part-time, full-time, seasonal employees: If they’re your employees, assume you need coverage.
Business owners/officers/members: Some owners can elect to be exempt for themselves in specific entity types by filing an exclusion with the Commission (it references Md. Labor & Employment § 9-206).
Independent contractors: This is where employers get tripped up. If someone is treated like an employee (direction, control, ongoing work), you may still be on the hook—so it’s worth getting clear guidance rather than guessing.

If you’re in Annapolis or elsewhere in Anne Arundel County and you’re not sure whether a role should be treated as an employee vs. an independent contractor—or whether an owner can be excluded—Simpson & Blom Insurance can help you sort it out and get the right policy in place before it becomes an audit or claims problem.

Why workers’ comp matters (beyond “because the state says so”)

Workers’ compensation exists so that when someone is hurt on the job, there’s a built-in system to help cover medical bills and lost wages. Maryland’s People’s Law Library also explains a key tradeoff: workers’ comp is generally no-fault, and in most cases injured employees cannot sue employers for damages for covered injuries.

That means workers’ comp can protect:

Your employee, with faster access to care and wage benefits after an injury
Your business, by reducing the risk that one injury becomes a business-threatening financial event

And if you’re thinking, “We’re a small shop—does this really apply to us?” Maryland’s Commission guidance makes it clear that the requirement is broad.

What if you don’t carry it?

Maryland’s Commission guidance describes criminal penalties for failing to secure required workers’ comp coverage (including fines and potential imprisonment).

Separately, Maryland law also gives the Commission authority to order an uninsured employer to secure insurance and to assess penalties, including a penalty up to $25,000 paid to the Uninsured Employers’ Fund in certain failure-to-insure situations.

How workers’ comp premiums are generally determined

Most employers can think of workers’ comp pricing as a formula built from a few core ingredients:

1) Payroll (the main “size” driver)

Premium is generally calculated based on the total payroll paid or payable for covered employees.
More payroll usually means more premium, because more payroll typically means more exposure.

2) Job classifications (the main “risk” driver)

Your employees’ job duties are assigned to classification codes. Higher-risk work (for example, many types of construction) usually costs more per payroll dollar than lower-risk work (like many office roles).

3) Claims history / experience modifier (as you grow)

Over time, many employers are impacted by an experience modification factor (mod), which compares your loss experience to similar employers and can produce a credit or debit.

In plain language: what your people do and how safely you operate over time can affect what you pay.

Quick checklist for new Maryland employers

If you’re just getting started in Annapolis or Anne Arundel County, here’s a practical “don’t miss anything” list:

Confirm you have employees (even one) → plan on workers’ comp coverage.
Gather basics for quoting: estimated annual payroll, job titles/duties, number of employees, entity type, and FEIN.
Decide how you’ll comply: most employers purchase a policy through an authorized insurer (self-insurance requires approval).
Clarify owner/officer elections (if applicable): if you’re trying to exclude eligible owners, make sure it’s done properly with the Commission process.
Put a simple safety + reporting routine in place: fewer injuries is better for people and for long-term costs.

Get set up the straightforward way with Simpson & Blom Insurance

If your goal is: “I want to be compliant, protect my team, and avoid surprises,” that’s exactly what workers’ comp is for.