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Who Must Carry Workers’ Compensation Insurance?

Businesses – such as corporations, sole proprietorships, limited liability companies, and partnerships – that employ 3 or more employees are required to have workers’ compensation insurance under the North Carolina Workers’ Compensation Act.

Important Factors: 

  • Sole proprietors, members of LLCs, and partners are not automatically counted as employees.
  • Executive officers or directors of a non-profit corporation are also not automatically counted as employees as long as they meet requirements under the North Carolina General Statutes.
  • Corporate officers may be excluded from coverage, but are still counted for when determining if a business has 3 or more employees.
  • An employer still needs coverage even if they call their employees “independent contractors.”
  • If you subcontract work to a subcontractor who does not have Workers’ Compensation, you may be liable for work-related injuries of the subcontractor’s employees.
If You Fail to Carry Workers’ Compensation, You May:
1.) Face penalties
2.) Be charged with a misdemeanor
3.) Be charged with a felony
4.) Even be imprisoned
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