FAQ: Workers' Compensation Insurance in North Carolina

Workers' compensation insurance (or "worker's comp") is a policy that is designed to protect employers and employees alike. It can provide coverage for medical expenses, lost wages, and rehabilitation services if an employee is injured on the job or is diagnosed with an occupational illness.

Workers’ compensation insurance rates in North Carolina are on par with national average rates.

Every type of job is assigned a base rate for coverage by the NC Department of Insurance. Workers' compensation insurance companies must use these base rates to calculate costs but can raise or lower these base rates up to 25% based on discounts, incentives, and policyholder claims histories.

Let's look at some workers' compensation base rate ranges for a few different kinds of jobs in North Carolina. These rates are for every $100 of employer payroll.

  • Landscapers:  $3.88 to $10.60
  • Plumbing contractors:  $3.15 to $8.60
  • Short haul truckers:  $6.20 to $16.93
  • Retail store workers:  $1.30 to $3.55
  • Clerical workers:  $0.10 to $0.27
  • Restaurant workers:  $0.96 to $2.62

Companies with a good safety record will pay rates on the lower end of these ranges, while those with unusually high numbers of employee injuries will pay rates at the higher end.

Your quoted costs will be based on the number of employees you have, how much they are paid, the types of jobs they do, and your company's history of accidents and workers’ compensation claims.

North Carolina law requires all employers with three or more employees to have workers’ compensation insurance. All employees, including minors and undocumented workers, must be covered. Additionally, any company that works with radiation must purchase workers’ comp insurance regardless of the number of workers.

There are a few exceptions. You do not need to buy coverage for:

  • Sole proprietors, partners, corporate officers, or LLC members
  • Agricultural workers, unless you have 10 or more non-seasonal workers
  • Domestic/household workers
  • Casual employees
  • Certain railroad employees

In North Carolina, workers' compensation coverage is required immediately upon hiring a new employee. Policies can be purchased through a commercial provider or through the state’s assigned risk pool. Approved businesses may opt to self-insure.

Workers' compensation insurance can protect your business against financial losses and potential lawsuits by ensuring that workers who are injured on the job receive the medical benefits and compensation for lost wages they deserve. 

Workers' compensation insurance in North Carolina provides injured employees with:

  • Full coverage for all medical treatment and hospital stays
  • Coverage for related expenses like ambulance rides, prescription medication, physical therapy, and supplies like crutches, wheelchairs, and slings
  • Mileage reimbursement if an employee must drive further than 20 miles round trip for necessary medical appointments
  • Disability pay for employees who must take time off work to recuperate
  • Vocational rehabilitation if a worker injury leaves them unable to return to their job
  • Funeral or burial costs, and death benefits for the employee's spouse and dependents if a work injury is fatal

While workers’ compensation covers a lot of work-related injuries and illnesses, it has some limitations.

Your workers’ compensation company is likely to deny coverage for:

  • Claims for workers who are not official employees of your business
  • Employee illnesses or injuries sustained outside of working hours
  • Injuries or illnesses that are related to preexisting conditions
  • Accidents that occurred while the employee was under the influence of drugs or alcohol
  • Injuries sustained while committing a serious crime
  • Intentional and/or self-inflicted injuries

Be sure to be aware of what your policy will and will not cover when making a purchase. An independent insurance agent can help you understand your policy's fine print.

A workers' compensation certificate is a document that shows proof of insurance. Other names this document goes by include:

  • Certificate of Insurance (COI)
  • Insurance certificate
  • Certificate of insurance form
  • Subcontractor certificate of insurance
  • Proof of insurance

Sometimes, clients may request to see this proof before they will hire you to do a job. The workers' compensation insurance certificate includes details like:

  • Name and address of the policyholder
  • Name and address of the insurer
  • Type of insurance policies held by the insured
  • Policy number(s)
  • Effective dates of coverage

You will be issued this certificate by your insurer when you purchase or renew your workers’ compensation policy. 

Independent insurance agents make finding the right coverage easy by shopping and comparing insurance quotes for you. These agents can clarify the fine print so you know exactly what you’re getting when you buy any type of policy through them.

No business is too small to benefit from working with an independent agent. These agents are free to work with multiple insurance companies as they search for the best workers' compensation coverage at the most competitive price. Arrange an obligation-free consultation with an independent insurance agent near you to get started.

In most cases, workers' compensation benefits received by employees are not taxable on the state or federal level.

What Are the Best Workers' Compensation Insurance Companies in North Carolina?

National Average Cost of Workers' Compensation Insurance

Healthcare $1,825 Per $100,000 payroll

Retail Trade $2,850 Per $100,000 payroll

Construction $7,430 Per $100,000 payroll


Workers' Compensation Insurance Laws in North Carolina

  • With few exceptions, all employers in North Carolina with three or more employees are required to either cover their employees with a workers' compensation insurance policy or be approved by the state to self-insure.
  • When employers are made aware of a work-related injury or occupational illness that requires medical attention, they must immediately notify their workers’ compensation insurance company.
  • If a work-related injury necessitates that the injured employee miss more than one day of work and/or if their medical expenses exceed $4,000, the employer or their insurance carrier must file Form 19 (Employer’s Report of Employee’s Injury to the Industrial Commission) within five days of being notified of the injury.
  • When Form 19 is filed with the Industrial Commission, the employer must provide the injured employee with a copy of the form as well as a blank Form 18 (Notice of Accident to Employer and Claim of Employee) that the employee will need to complete and submit.
  • With the exception of emergency treatment, all medical care must be administered by a doctor designated by the employer or the employer’s insurance company.
  • Failure to carry required workers' compensation can result in civil penalties of $50 to $100 a day to be paid by the business. Additionally, employers can be charged with a misdemeanor or felony, face jail time, and be personally responsible for covering the assessed cost of any injuries incurred by employees while uninsured.


Common Workers' Compensation Claims in North Carolina

Employers in North Carolina report around 65,000 worker injuries a year.


The Top 5 Industries with Workers’ Compensation Claims in NC

  1. Trade, transportation, and utilities
  2. Education and health services
  3. Manufacturing
  4. Leisure and hospitality
  5. Construction

The two top industries (trade, transportation, and utilities and education and health services) account for 53% of all occupational injuries and illnesses in this state.


The Top 10 most reported injuries in North Carolina are:

  1. Overexertion
  2. Slips, trips, and falls
  3. Struck by an object
  4. Motor vehicle accidents
  5. Being compressed between something or caught by something
  6. Electrocution
  7. Burns caused by fires, heat, steam, or chemicals
  8. Twisting injuries
  9. Strains and injuries from lifting or carrying heavy objects or people
  10. Victim of assault