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Vermont business insurance: requirements and costs

Vermont has no employee-count threshold for workers' comp: every employer other than the State and local governments must secure coverage, and only a few categories of worker are excluded.⁠3⁠4 NCCI files the loss costs that insurers build their rates on, and its September 2025 filing sought a 1.7% decrease effective April 1, 2026, though we could not find the regulator's approved figure.⁠1⁠2 Vermont employers pay more than the national figure: NASI estimated $1.24 per $100 of covered wages for 2023 against $0.98 nationally.⁠8

Checked against 11 sources Last reviewed How we check figures

Vermont at a glance

Workers’ comp requiredAll employers, from the 1st employee
Where employers buy itPrivate insurers
Rates set byNational Council on Compensation Insurance
Employer comp cost, 2023$1.24 per $100 of covered wages (US $0.98)
Comp rate index, 2024$1.60, ranked 5 of 51 (1 = most expensive)
Employer health premium, 2025$10,004 single, $25,450 family (average total premium)
Auto liability minimum25/50/10

Vermont has no state fund and is not monopolistic. An employer secures comp by buying a policy from an authorized insurer, by buying guarantee insurance, by qualifying with the Commissioner of Labor to self-insure, or by joining an approved nonprofit self-insurance corporation.⁠3 The Department of Financial Regulation (DFR) gives the Commissioner a recommendation on each self-insurance application.⁠3 Pricing runs on loss costs. NCCI files advisory loss costs and separate assigned-risk rates, each insurer adopts a loss cost multiplier (LCM), and DFR posts the loss costs, LCM reports and assigned-risk rate sheets, while noting that they are NCCI's copyrighted product.⁠1 NCCI's summary of the filing effective April 1, 2026 proposed -1.7% for the voluntary market and -1.8% for assigned-risk rates, based on policy years 2021 to 2023 valued at year-end 2024. It describes a long-term decline in claim frequency and a small decrease in the loss-adjustment-expense component.⁠2 DFR's page says loss costs and assigned-risk rates were unchanged in 2024.⁠1 Employers also fund the Department of Labor's administration of the program: the statute sets a contribution on direct workers' comp premium, which the General Assembly resets each year, and names 1.4% in the text.⁠11

Official data places Vermont well above the national average. NASI estimated that employers spent $1.24 per $100 of covered wages on comp in 2023, down from $1.55 in 2019. By our calculation that is a 20% fall, a little faster than the 16% national decline ($1.17 to $0.98), but Vermont is still about 26% above the national figure.⁠8 Oregon's 2024 ranking uses rates in effect on January 1, 2024. It put Vermont 5th most expensive of 51 jurisdictions, at an index of $1.60 per $100 of payroll, or 147% of the median state (Georgia, $1.09).⁠9 The index is built from manual rates for a fixed set of classes, so it measures the rate structure, not what Vermont employers actually pay. Health coverage is also costly for small firms. In AHRQ's 2025 survey, 30.3% of Vermont private-sector establishments with fewer than 50 employees offered health insurance, against 32.1% nationally. Where offered, the average small-firm single premium was $11,460, about 27% above the $9,034 national small-firm figure by our calculation, and the employee share averaged $2,622, against $1,924.⁠10

Two Vermont rules change what you carry. Paid leave is voluntary: the state's Family and Medical Leave Insurance (FMLI) program, insured by The Hartford, lets employers with two or more employees choose employer-paid, split or employee-paid contributions, and employers with fewer than two employees and individuals can buy through a separate individual option. It imposes no mandatory payroll tax.⁠7 And an uninsured employer is exposed personally: if the business is a corporation, its officers and majority stockholders are personally liable for benefits owed to an injured employee, partners are liable in a partnership, and an injured employee can place a lien on property.⁠3 By our calculation, an employer that went 30 days uninsured and was assessed the maximum daily penalty would owe up to $4,150 (7 days at $100 plus 23 days at $150), before stop-work-order penalties, which add up to $250 per employee for each day after an order.⁠5

Workers’ compensation in Vermont

Every employer except the State and county or municipal bodies must secure comp for its employees; Vermont sets no minimum headcount.⁠3 Excluded workers include casual employees outside the employer's trade or business, amateur athletes, farm workers where the employer's payroll is under $10,000 a year, and household service workers, unless the employer opts in.⁠4

Who is exempt

  • Casual employment that is not for the purpose of the employer's trade or business
  • Individuals engaged in amateur sports
  • Agriculture or farm employment for an employer whose aggregate payroll is under $10,000 in a calendar year, unless the employer notifies the Commissioner it wants coverage; a contract of insurance counts as notice
  • A member of the employer's family living in the employer's house, unless that person's wages are included in the payroll on which the premium is based
  • Service in or about a private dwelling, unless the employer notifies the Commissioner it wants coverage
  • A sole proprietor or partner-owner of an unincorporated business who meets all six statutory independence tests, including a written agreement stating the individual is not an employee and has no employees
  • A licensed real estate broker or salesperson paid solely by commission, under a written agreement stating the individual is not an employee and is not eligible for coverage
  • With the Commissioner's approval, a corporation or LLC may exclude up to four executive officers, managers or members

Buying coverage and who sets the rates

Employers buy from any insurer authorized to write comp in Vermont, buy guarantee insurance, self-insure with the Commissioner's approval, or join an approved nonprofit self-insurance corporation.⁠3 There is no state fund. Carriers must offer, on written request, a rate with a deductible of at least $500 of benefits per injured employee, which the employer reimburses after the carrier pays the claim.⁠3

Latest rate decision (1 Apr 2026): NCCI filed on Sept. 18, 2025 for DFR's approval a -1.7% change to voluntary-market loss costs and -1.8% to assigned-risk rates effective April 1, 2026. DFR lists 2026 advisory loss costs and assigned-risk rate sheets on its workers' comp page; we could not find the regulator's approved percentage on an official page. Official notice.

Allowed by establishing financial responsibility to the Commissioner of Labor's satisfaction, with surety bonds, cash deposits, reserves or excess risk insurance set by rule, or through an approved nonprofit self-insurance corporation. DFR provides a recommendation on each application.⁠3

Penalties for going without

After a hearing, the Commissioner can assess up to $100 a day for the first seven days uninsured and up to $150 a day after that. A stop-work order is mandatory after investigation, with up to $250 a day more and up to $250 per employee per day after an order to obtain coverage; violating the order carries a civil penalty of up to $5,000 (first) or $10,000 (later), or a criminal fine of up to $10,000 or up to 180 days in jail.⁠5 Corporate officers and majority stockholders, partners, or principals are personally liable for benefits owed to an injured employee, and the employee may lien the employer's property.⁠3

What Vermont employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearVermontUnited States
2019$1.55$1.17
2020$1.40$1.08
2021$1.31$1.01
2022$1.26$1.00
2023$1.24$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 Vermont’s index for rates in effect on 1 January 2024 at $1.60 per $100 of payroll, 47% above the national median of $1.09 (rank 5 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 Vermont

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureVermontFirms under 50United States
Single coverage, total premium$10,004$11,460$9,025
Family coverage, total premium$25,450$28,494$26,281
Employee share, single$2,187–$1,817
Employers offering coverage42.2%30.3%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 Vermont

Every vehicle registered in Vermont, including business vehicles, must carry at least 25/50/10 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Owners of registered vehicles must carry liability of at least $25,000 per person, $50,000 per crash for two or more people, and $10,000 property damage, or file $115,000 of self-insurance evidence with the Commissioner of Motor Vehicles. The fine for no coverage is up to $500. The statute shows no 2025-2026 change to these limits.⁠6

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 Vermont rules that affect insurance costs

Corporate officers can opt out, up to four

A corporation or LLC may, with the Commissioner's approval, exclude up to four executive officers, managers or members. If every officer or member opts out and the business has no employees, it need not buy comp. An excluded person who is hurt can still sue, and the employer keeps its defenses in that suit.⁠4

Independent contractor opt-out needs a written contract

A sole proprietor or partner-owner is excluded only if all six tests are met, including work distinct from the hiring party's, control of the means and manner, and a written agreement stating the individual is not an employee, has no employees and has not hired other contractors. If that individual turns out to have employees, those employees can claim against either party to the agreement.⁠4

Administration fund contribution

Employers fund the Department of Labor's comp administration through the Workers' Compensation Administration Fund: a percentage of direct workers' comp premium, which the General Assembly sets, plus 1% of self-insured losses.⁠11

Vermont compared with its neighbors

Workers’ comp and health insurance costs, Vermont and neighboring states
Vermont$1.24$1.60$10,004
New Hampshire$0.76$1.22$9,502
New York$1.12$1.98$10,913
Massachusetts$0.65$0.97$10,436

Sources

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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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