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Government Required Insurance

Our experienced agents will help you navigate the complexities of government-required insurance.

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Government Required: Service

Does the government require worker's comp insurance for my business?


  • Most states: All businesses with at least one employee (including the owner) are required to carry workers' compensation insurance.

  • Some states: Businesses with a small number of employees (usually 3 or less) may be exempt.

  • Limited exceptions: Some specific types of businesses or workers may be exempt, such as sole proprietors with no employees, independent contractors, or family farms.


  • Self-insurance: In some states, businesses can choose to self-insure instead of purchasing insurance. This requires meeting specific financial requirements and demonstrating the ability to pay worker's compensation claims directly.

  • Federal government: Federal government employees are covered by a separate system and not subject to state worker's compensation laws.

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Does the government require unemployment insurance for my business?

No, the government does not directly require unemployment insurance for businesses. However, most businesses are indirectly required to contribute to unemployment insurance programs by paying taxes.

In most states, businesses are required to pay SUTA taxes if they meet one of the following criteria:

  • They have paid wages of $1,500 or more in any quarter of a calendar year.

  • They have employed at least one employee for some part of a day in each of 20 different calendar weeks.

There are some exceptions to these requirements, such as for:

  • Family businesses

  • Nonprofit organizations

  • Small businesses with a very small number of employees

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Does the government require my business to have disability insurance?

Whether the government requires your business to have disability insurance depends on two main factors:

1. The type of disability insurance:

  • Workers' compensation: Yes, in most states, the government mandates that businesses carry workers' compensation insurance. This insurance provides medical benefits and wage replacement to employees who are injured or become ill on the job.

  • Private disability insurance: No, the government does not require businesses to have private disability insurance. This type of insurance provides income to employees who become disabled and are unable to work, but it is optional for businesses to offer.

2. The size and location of your business:

  • Small businesses: Some states exempt small businesses with a very small number of employees (e.g., 3 or fewer) from the workers' compensation requirement.

  • Specific industries or workers: Certain industries or types of workers might have different requirements. For example, agricultural workers may have separate disability insurance options.

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Does the government require my business to have commercial car insurance?

1. Use of vehicles for business purposes:

  • Regular use: If your business uses vehicles regularly for work-related activities, such as transporting goods, delivering services, or visiting clients, most states require commercial auto insurance.

  • Employee driving: If employees use their personal vehicles for business errands, you may need to require them to carry special endorsements on their personal auto insurance or provide them with commercial car insurance.

  • Commuting: Generally, commuting to and from work is not considered a business use and doesn't require commercial coverage.

2. State regulations:

  • State requirements: Each state has its own regulations regarding commercial auto insurance. Some states require it for all business vehicles, while others have specific exemptions based on vehicle type or usage.

  • Minimum coverage: States set minimum liability coverage limits for commercial vehicles.

3. Vehicle type and ownership:

  • Owned vehicles: If your business owns vehicles used for work, commercial auto insurance is mandatory in most cases.

  • Leased or rented vehicles: Leased or rented vehicles typically require commercial insurance as part of the agreement.

  • Personal vehicles used for business: If employees use their personal vehicles for work, some states require them to carry commercial insurance endorsements.

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