I bet this question has crossed your mind a few times since you decided to open your own business. Many are uncertain about what are the state requirements regarding Workers Compensation Insurance in Virginia. This is understandable since there are several parts to the law that you must understand in order to be certain if you are required to have coverage.

More Than Two Employees

Virginia Workers Compensation Insurance is required if you have more than two employees. This includes full-time and part-time employees. If your business is an LLC or Corporation, the executive officers, and members also count as employees.

Sole Proprietors

Sole Proprietors are exempt from Virginia Workers Compensation Insurance. You can elect to be covered, and you would be required to obtain coverage if you have more than two employees.

Independent Contractors/1099 Employees

1099 Independent Contractors are considered “employees” under Virginia Workers Compensation law. How you pay someone does not determine their work status. If you control their wage, time worked, or where they work the state defines them as an employee. This part of the law is the most important and misunderstood by business owners.

Businesses Outside Of The State Doing Business in Virginia

Businesses not based in Virginia but doing business here must obtain Workers Compensation Insurance. Even if you are working temporality in Virginia, you will still need to obtain coverage.


Volunteers are not subject to Virginia Workers Compensation law. The reason for this is they do not meet the classification of “employee” since they are not paid a wage, and are free to work when they want to.

Penalty For Not Having Virginia Workers Compensation Insurance

If you do not obtain Workers Compensation Insurance the fine could be $250 each day without coverage, up to a maximum fine of $50,000. Obviously, you want to make sure you obtain coverage to avoid the penalty.

Final Thoughts

Hopefully, you have a better understanding of the Virginia Workers Compensation Insurance requirements. This coverage is probably the most important aspect of business insurance since it involves your employees. I highly recommend you obtain Workers Compensation Insurance even if you aren’t required by law to have it. If you would like more information about what’s covered under Workers Compensation Insurance, or how much Workers Compensation Insurance costs, click here.