Workers' comp is the policy NC business owners get wrong most often; not because it is optional, but because the rules about who counts as an employee surprise almost everyone. Get it wrong and the bill arrives at audit, or after an injury. We will tell you where your business stands in one conversation.
General description only; the policy that is issued, its terms, and the carrier's determination control.
Workers' compensation pays medical costs and a portion of lost wages when an employee is injured on the job, and it is the mechanism that generally keeps that injury from becoming a lawsuit against the business. Benefit amounts are set by North Carolina statute and the Industrial Commission, not by the agency and not by a number on this page. The issued policy, the class of injury, and the Commission's rules control what is paid. This is a general description only.
North Carolina generally requires workers' compensation once a business regularly employs three or more people, or qualifies as self-insured. Part-time and seasonal workers generally count. Corporate officers count toward the three even if they later exclude themselves from coverage; a corporation with two officers and one employee is already at the line. Sole proprietors, partners, and LLC members generally are not counted unless they elect coverage. Radiation work is a one-employee exception. If you are near three people in any working arrangement, it is worth ten minutes to find out where you stand.
Every type of work has a classification with its own rate. Roofing costs more than bookkeeping because the risk is different. Premium is calculated per $100 of payroll in each class code, so the bill moves with headcount, wages, and whether people were put in the right code. The wrong code means overpaying now or a surprise at audit. We do not publish an average cost, because a roofer and an office shop are not the same risk at the same payroll. Actual premium depends on underwriting, claims history, and (once you are large enough) the experience modifier.
Sole proprietors with no employees generally are not required to carry comp in NC, but general contractors often require a certificate from every sub anyway; otherwise that payroll can land on the GC's audit. That is what a ghost policy is for: an owner-excluded comp policy that satisfies the certificate when there is nobody to cover. It is a compliance tool. An excluded owner who gets hurt on a job has no comp benefits at all. We will tell you plainly whether a ghost policy fits or whether you actually need owner coverage. Trade businesses that also carry GL, tools, and trucks should see the rest of the package on our contractors insurance page.
Calling someone a 1099 contractor does not decide the question. How they actually work does. If the state finds they function as employees, they count. If a sub has no workers' compensation of their own, their payroll can be picked up as yours at audit. Collect a certificate from every sub, every time, and keep it. Misclassification is one of the most common and expensive comp mistakes in the Onslow County trades.
Comp premiums are estimates settled at year end. The carrier audits actual payroll and class codes, then bills or credits the difference. The surprise bills come from three places: payroll grew faster than estimated, employees drifted into higher-rated work, or uninsured subcontractors were picked up as your payroll. The fix is boring and effective: realistic estimates up front, certificates collected from every sub, and a midyear check-in when headcount changes. We build that check-in into how we service the policy. Estimating low does not reduce what you owe; it moves the bill to the audit.
An experience mod is a multiplier applied to premium once the business is large enough to have one. It compares your claims history to similar businesses. A mod below 1.0 reduces premium relative to the manual rate; claims push it up. New shops usually do not have one on day one.
Contractors, landscapers, and service businesses in Jacksonville, Richlands, Swansboro, and out to the coast who just hired help or just incorporated. Officers count. If you are not sure whether you have crossed the line, that is the conversation to have before the first injury or the first GC audit.
Sole proprietors and single-member LLCs bidding work for a general contractor who will not let you on site without a workers' comp certificate. A ghost policy may be the fit. It may not. We will say which.
The three-employee rule is not only a contractor problem. A kitchen, a salon, a clinic, or a small office that has grown past two people is in the same statute. Class codes differ; the counting rules do not.
If the people on your jobs do not all sit on your payroll, the audit will still ask who they were and whether they had their own coverage. Bring the certificates you have. We will tell you where the gaps are.
Generally yes, once a business regularly employs three or more people. Corporate officers count toward that three. Sole proprietors, partners, and LLC members generally do not unless they elect coverage. Radiation work is a one-employee exception. Agriculture and a few other categories have different thresholds. The Industrial Commission publishes the rule; we will apply it to your structure rather than leaving you to count it alone.
You carry a policy (or qualify as self-insured). Premium is based on payroll in each class of work. If an employee is hurt on the job, the policy is meant to pay medical costs and a portion of lost wages under the Workers' Compensation Act, and it is the usual path that keeps that injury from becoming a civil suit against the employer. Claims are administered under the North Carolina Industrial Commission. The issued policy and the statute control; this page is not the policy.
Generally not at two, but the counting rules for officers, members, and part-timers trip people up, and your contracts may require it regardless. A corporation with two officers and one helper is already at three. Tell us your structure and we will give you a straight answer.
The label does not decide it; how they actually work does. And if a sub has no comp of their own, their payroll can end up on your audit. Collect certificates from every sub, every time.
A multiplier applied to your premium once your business is large enough, based on your claims history compared to similar businesses. History better than the average pushes it below 1.0; claims push it up. New and small operations usually do not have one yet.
NC generally allows qualifying owners and officers to exclude themselves. It lowers the payroll the carrier rates, but an excluded owner injured on the job has no comp benefits. Worth an honest conversation, especially in the trades.
It is a rate per $100 of payroll in each class code, then adjusted for your claims history and (when you have one) the experience modifier. We quote from your actual work and payroll rather than a published average, because the class is most of the number. Estimating payroll low does not reduce the eventual cost; the audit trues it up.
Once the policy is in place, often the same business day. Call or text 910-378-1378 with the certificate holder's name and address.
Have your rough payroll and what everyone does day to day. We will handle class codes and the counting rules, shop the carriers we represent, and set the policy up so the year-end audit is a reconciliation.
This page is for informational purposes only and is not an insurance policy. Coverage is determined solely by the terms, conditions, and exclusions of the actual policy issued. Requirements referenced are specific to North Carolina; South Carolina rules differ. Insurance coverage is not bound or altered until confirmed by an authorized representative of Kolstad Insurance Services.
