Ask an insurance marketer what your LLC "needs" and you'll get a list: general liability, professional liability, cyber, umbrella. Ask what the law requires and the list collapses to nearly one item — workers' compensation — plus auto coverage if the business owns vehicles. This page is about the legal floor: what each state actually mandates, verified against the state agency that enforces it. What's worth buying beyond the floor is a different question, and one this page deliberately doesn't answer — that depends on your business, and we don't sell advice.
The one insurance states actually require
Workers' compensation is a creature of state law, and every state built its own trigger. The pattern: in most states the duty starts with your first employee — California, New York, Illinois and the majority run this way. But a band of mostly Southern states sets numeric thresholds, and getting your state's number wrong in either direction is expensive: carry it too late and you face penalties (Missouri makes knowingly failing to insure a class A misdemeanor with fines up to three times the annual premium or $50,000); buy it before you legally must and nobody will stop you from spending the money.
The threshold states — verified against each state's own agency
Every row below was checked against the named official source in August 2026. Where a state treats construction differently, that's listed — construction triggers are almost always stricter.
| State | Coverage required at… | Construction / special rules | Official source |
|---|---|---|---|
| Alabama | 5+ employees | Contractors treated separately | AL Dept. of Labor |
| Arkansas | 3+ employees | 2+ for building/repair work; 1+ if a contractor subcontracts | AR Dept. of Labor & Licensing |
| Florida | 4+ employees (non-construction) | 1+ in construction; agriculture: 6 regular or 12 seasonal | FL CFO, Division of Workers' Comp |
| Georgia | 3+ workers, incl. regular part-time | Officers/LLC members count in the tally | GA State Board of Workers' Comp |
| Mississippi | 5+ regularly employed | Below 5, coverage is voluntary | MS Workers' Comp Commission |
| Missouri | 5+ employees | 1+ in construction; part-time and family members count | MO Dept. of Labor |
| New Mexico | 3+ workers | Working owners, family, part-time and seasonal all count | NM Workers' Comp Administration |
| North Carolina | 3+ employees | Applies to LLCs, corporations, sole proprietorships alike | NC Industrial Commission |
| South Carolina | 4+ employees | Part-time workers and family members count | SC Workers' Comp Commission |
| Tennessee | 5+ full- or part-time employees | 1+ in construction trades (or a specific exemption) | TN Bureau of Workers' Comp |
| Virginia | More than 2 employees | Subcontractors' employees count toward a contractor's total | VA Workers' Comp Commission |
| Wisconsin | 3+ employees — or 1+ once you've paid $500 in wages in a quarter | Whichever trigger hits first | WI DWD |
| Texas | Not required for most private employers | Opting out has real costs — see below | TX Dept. of Insurance |
Every other state: as a general rule, coverage is required from the first employee — with each state defining "employee" its own way and carving its own exemptions for agriculture, domestic work and casual labor. Before hiring anyone, check your state's workers' comp agency directly; our state hub links the relevant offices.
The trap in the fine print: you might count as your own employee
The most consequential detail on this page, and the one general guides skip: several states count LLC members and corporate officers when tallying employees toward the threshold. Florida's official guidance says coverage maths includes "business owners who are corporate officers or Limited Liability Company (LLC) members." Georgia's board says the same: incorporate or form an LLC, and "the officers or members are included in the employee count." Alabama's Department of Labor confirms the term employee "includes all full or part-time employees, officers of a corporation or members of an LLC."
The practical consequence: a Georgia LLC with two working members and one hire can already be at three — at the threshold — even though the owners think of themselves as "just the founders." Most of these states also offer an exemption-election form (Georgia's is Form WC-10) letting officers exclude themselves, but the exemption must be filed, not assumed. If you're near your state's number, count every human working in the business, then check whether the owners can and should formally opt out.
Texas: optional, with strings
Texas is the only state where most private employers can simply decide not to carry workers' compensation. Roughly a fifth of Texas employers are "non-subscribers." But the state's own materials are blunt about the price: a non-subscriber loses the legal protection against most workplace-injury lawsuits — an injured employee can sue, and the employer gives up several common-law defences. Non-subscribers also have paperwork duties: notify the Division of Workers' Compensation, post a no-coverage notice in the workplace in English, Spanish and other languages as needed, and give written notice to each new hire. Optional, in other words, does not mean consequence-free.
Four states where the government is the insurer
In Ohio, North Dakota, Washington and Wyoming — the "monopolistic" states — workers' comp isn't bought from a private insurer at all. Coverage comes from the state itself: the Ohio Bureau of Workers' Compensation, North Dakota's Workforce Safety & Insurance, Washington's Department of Labor & Industries, and the Wyoming Department of Workforce Services. If you're comparing insurance quotes for a business in these states, no quote will include workers' comp — you register with the fund instead. (One consequence worth knowing: policies from these funds generally don't include employer's liability coverage the way private policies elsewhere do, which is why 'stop gap' coverage exists — ask about it if you operate there.)
What about a single-member LLC with no employees?
The question most of our readers actually have. As a general rule: no employees, no workers' comp requirement — a single-member LLC where only the owner works is below every state's threshold, including the first-employee states. The nuances: if you take on even one helper — part-time, family, "casual" — you may have created an employee in your state's eyes (Missouri and South Carolina both count part-timers and family members); if you work as a subcontractor in construction, many states make the general contractor responsible for covering you, which in practice means GCs will demand you carry your own policy or an exemption certificate before you set foot on site; and client contracts routinely require insurance the law doesn't. That last point is the honest summary of most small-LLC insurance reality: the market requires more than the state does — landlords want general liability, clients want professional liability, lenders want everything. None of that is statute; all of it is negotiation.
What states don't require
For a typical LLC, no state statute requires general liability insurance — it's near-universal in practice because contracts and leases demand it, not because the law does. Professional liability is mandated only for specific licensed occupations, by licensing boards rather than business law — physicians in several states, lawyers in Oregon and a few others, certain contractors — so the requirement, where it exists, follows your licence, not your LLC. Commercial auto follows vehicles: if the business owns or operates vehicles, your state's ordinary auto financial-responsibility minimums apply to them. And health, disability and unemployment obligations arrive with employees through entirely different statutes — payroll registration, not insurance shopping.
One adjacent obligation that is universal for LLCs: keeping a registered agent — the legal-mail requirement every state does impose. That's the rest of this site: start with your state's guide, the fee calculator, and the deadline calendar.