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Maryland business insurance: requirements and costs

Maryland's Insurance Administration (MIA) approved a 12.3% average cut in NCCI's voluntary-market workers' comp loss costs effective January 1, 2026, after a 13.2% cut the year before.⁠1 A single covered employee triggers the comp requirement, and Chesapeake Employers' Insurance Company competes with private carriers while also serving as the insurer of last resort.⁠3⁠11 Maryland's paid family leave program has no contributions in 2026; they start January 1, 2027.⁠15

Checked against 19 sources Last reviewed How we check figures

Maryland at a glance

Workers’ comp required1+ covered employee
Where employers buy itPrivate insurers and a competitive state fund (Chesapeake Employers' Insurance Company)
Rates set byNational Council on Compensation Insurance
Employer comp cost, 2023$0.74 per $100 of covered wages (US $0.98)
Comp rate index, 2024$0.89, ranked 37 of 51 (1 = most expensive)
Employer health premium, 2025$8,760 single, $24,717 family (average total premium)
Auto liability minimum30/60/15

Maryland comp is rated on a blend of prior approval and competition. NCCI files pure premium loss costs with the MIA for every insurer, and since January 1, 2023 that includes Chesapeake Employers' Insurance Company (CEIC), the former Injured Workers' Insurance Fund. Once the MIA approves the loss costs, each insurer files its own rates that adopt them and add its expense multiplier.⁠1 CEIC is the largest writer, with 19.14% of 2024 comp premium (about $936 million written by 104 insurers in total), and the law makes it the insurer of last resort, so an employer that is turned down elsewhere can still get coverage.⁠1⁠11 Employers can also buy from any authorized insurer, join a private self-insurance group, or self-insure individually.⁠7

The January 1, 2026 decrease came from claims data. NCCI filed it on August 14, 2025, using policy years 2022 and 2023 valued at year-end 2024.⁠2 The MIA's report breaks the approved -12.3% into -11.7% for claims experience and development, -1.1% for loss-ratio trend and +0.4% for benefit costs. It adds that individual employers may see a decrease or an increase, depending on class, payroll and other factors.⁠1 NCCI's filings have been decreases every year from 2015 through 2026.⁠1 The official cost data shows it. NASI puts Maryland employers' 2023 comp cost at $0.74 per $100 of covered wages, against $0.92 in 2019. By our calculation that is a 19% decline, a little more than the 16% national fall to $0.98.⁠17 Oregon's 2024 ranking, built from manual rates in effect January 1, 2024, put Maryland 37th most expensive of 51 jurisdictions, at $0.89 per $100 of payroll, or 82% of the median. Pennsylvania ($1.14, 21st) and Delaware ($0.97, 32nd) rank higher, while Virginia and the District of Columbia ($0.73 each) and West Virginia ($0.54) rank lower.⁠18 AHRQ's 2025 survey found 39.5% of Maryland private-sector establishments in firms with fewer than 50 employees offered health insurance, against 32.1% nationally. Among those that did, the average single premium was $7,628, about 16% below the $9,034 national small-firm figure by our calculation, with the employee paying $1,586 against $1,924.⁠19

Maryland's Family and Medical Leave Insurance (FAMLI) program does not yet affect payroll. Contributions begin January 1, 2027 and benefits begin by January 3, 2028. The rate is 0.9% of wages up to the Social Security wage base (reaffirmed by MD Labor in April 2026 for 2027), and current law caps it at 1.2%. Employers may withhold up to half from employees, and those with fewer than 15 employees remit only the employee half.⁠15 On auto, Maryland requires 30/60/15 liability, and personal injury protection is part of every policy unless the first named insured waives it in writing.⁠12⁠13⁠14 For budgeting, check your own class: the 12.3% is a statewide average of loss costs, not your rate. Our calculation shows the scale. A policy that cost $20,000 and moved exactly with the average, with no change in payroll, experience mod or insurer expense multiplier, would cost about $17,540 after the change. The assessment for an uninsured employer is criminal, not premium-based: a misdemeanor with a fine of up to $5,000, up to one year of imprisonment, or both.⁠9

Workers’ compensation in Maryland

Every employer with at least one covered employee must carry comp.⁠3 Paid corporate officers and LLC members are covered employees unless they qualify for and file an exemption.⁠4 Sole proprietors and partners are not covered unless they elect it, and a sole proprietor must work full time in the business to elect.⁠5

Who is exempt

  • Sole proprietors are not covered employees unless they elect coverage; the election requires full-time work in the business and written notice to the Commission and the insurer⁠5
  • Officers of a close corporation, up to five officers of other corporations, 20%-owner officers of farm corporations earning at least 75% of income from farming or of professional corporations, and LLC members with at least 20% of profits interests may elect exemption⁠4
  • Farm workers are covered only if the farmer has at least 3 full-time employees or a $15,000 annual full-time payroll⁠6

Buying coverage and who sets the rates

Employers buy from an authorized insurer, including Chesapeake Employers' Insurance Company, join a private self-insurance group, or self-insure individually.⁠7 CEIC is the insurer of last resort for employers that cannot find coverage elsewhere.⁠11 Insurers use NCCI loss costs approved by the MIA and add their own expense multipliers.⁠1

Latest rate decision (1 Jan 2026): The MIA approved NCCI's August 2025 filing: an overall -12.3% change in voluntary-market advisory loss costs effective Jan. 1, 2026 (-11.7% claims experience and development, -1.1% loss-ratio trend, +0.4% benefit costs). Individual classes and employers can move up or down.⁠1 Official notice.

Individual employers can self-insure with the Workers' Compensation Commission's approval, and private employers can join a self-insurance group under Title 25, Subtitle 3 of the Insurance Article.⁠7 An employer that self-insures without applying for approval commits a misdemeanor with the same $5,000 / one-year maximum.⁠9

Penalties for going without

Failing to secure compensation is a misdemeanor, with a fine of up to $5,000, up to one year of imprisonment, or both, and the officer who manages a corporation in Maryland is personally subject to the same penalty.⁠9 An employer in default on an award can be notified by the Commission that its license or permit to do business in Maryland may be suspended.⁠10

What Maryland employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearMarylandUnited States
2019$0.92$1.17
2020$0.86$1.08
2021$0.79$1.01
2022$0.79$1.00
2023$0.74$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts Maryland’s index for rates in effect on 1 January 2024 at $0.89 per $100 of payroll, 18% below the national median of $1.09 (rank 37 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Employer health insurance in Maryland

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureMarylandFirms under 50United States
Single coverage, total premium$8,760$7,628$9,025
Family coverage, total premium$24,717$25,156$26,281
Employee share, single$2,065–$1,817
Employers offering coverage53.4%39.5%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in Maryland

Every vehicle registered in Maryland, including business vehicles, must carry at least 30/60/15 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Security must cover up to $30,000 for one person and $60,000 for two or more people in bodily injury, plus $15,000 for property of others.⁠12 Personal injury protection of at least $2,500 is included unless the first named insured makes an affirmative written waiver.⁠13⁠14 The statute text shows no 2025-2026 change.

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Other Maryland rules that affect insurance costs

Principal contractors answer for subcontractors' employees

A principal contractor that sublets part of its own trade work is treated as the employer of the subcontractor's covered employees and must pay their comp claim. It may join the subcontractor in the claim and is entitled to indemnity from the employer that was liable independently, so an uninsured sub's claim lands on you first.⁠8

FAMLI starts collecting in 2027

Maryland paid family and medical leave contributions begin January 1, 2027 and benefits by January 3, 2028, after delays. Employers choose the state plan or an approved private or self-insured plan, and the 0.9% rate is not a 2026 cost.⁠15⁠16

Maryland compared with its neighbors

Workers’ comp and health insurance costs, Maryland and neighboring states
Maryland$0.74$0.89$8,760
Delaware$0.88$0.97$9,459
Pennsylvania$1.08$1.14$9,421
Virginia$0.48$0.73$8,970
West Virginia$1.05$0.54$8,878
District of Columbia$0.33$0.73$9,762

Sources

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  19. 19

National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

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Other states

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