Delaware small business insurance requirements: workers' compensation before the first day, 25/50/10 auto limits and PIP

Delaware: what the state requires of a small business

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In Delaware, almost every employer with one or more employees, full-time, part-time, seasonal or temporary, must have workers' compensation in place before the worker starts, with insurers required to tell the Department of Labor within 14 days when a policy lapses; and every registered vehicle must carry at least $25,000 per person, $50,000 per accident and $10,000 property damage liability plus personal injury protection limits of $15,000 per person and $30,000 per accident.

Reviewed by CoverMatch licensed agents, Licensed property & casualty agents · Reviewed Oct 11, 2026 Updated Oct 30, 2026

Delaware rules with sources
Topic	The rule in Delaware	Source
Workers' compensation	Almost every employer with one or more employees must carry workers' compensation, with only the limited exceptions in state law, and coverage must be in place before the worker starts. Sole proprietors and partners are outside coverage unless they elect in; corporate officers and LLC members are covered unless they opt out in writing.	19 Del. C. § 2306 and § 2372; Delaware Division of Industrial Affairs — Workers' compensation FAQs
Proof and lapse notice	Employers must produce proof of coverage on request, and an insurer that cancels or does not renew a policy must notify the Department of Labor within 14 days, which is how uninsured employers are identified.	19 Del. C. § 2374; Delaware Division of Industrial Affairs — Employer knowledge base
Auto liability minimums	Bodily injury $25,000 per person / $50,000 per accident and property damage $10,000 on every registered vehicle; proof of insurance is required to register, and driving uninsured brings a six-month suspension and a fine of $1,500 to $3,000.	21 Del. C. § 2118 and § 2902; Delaware Division of Motor Vehicles — Insurance requirements
Personal injury protection	Every Delaware auto policy must include personal injury protection limits of at least $15,000 per person and $30,000 per accident, payable regardless of fault; Delaware remains an at-fault state for liability.	21 Del. C. § 2118(a)(2); Delaware Department of Insurance — Auto insurance

Topic

The rule in Delaware

Source

Workers' compensation

Almost every employer with one or more employees must carry workers' compensation, with only the limited exceptions in state law, and coverage must be in place before the worker starts. Sole proprietors and partners are outside coverage unless they elect in; corporate officers and LLC members are covered unless they opt out in writing.

19 Del. C. § 2306 and § 2372; Delaware Division of Industrial Affairs — Workers' compensation FAQs

Proof and lapse notice

Employers must produce proof of coverage on request, and an insurer that cancels or does not renew a policy must notify the Department of Labor within 14 days, which is how uninsured employers are identified.

19 Del. C. § 2374; Delaware Division of Industrial Affairs — Employer knowledge base

Auto liability minimums

Bodily injury $25,000 per person / $50,000 per accident and property damage $10,000 on every registered vehicle; proof of insurance is required to register, and driving uninsured brings a six-month suspension and a fine of $1,500 to $3,000.

21 Del. C. § 2118 and § 2902; Delaware Division of Motor Vehicles — Insurance requirements

Personal injury protection

Every Delaware auto policy must include personal injury protection limits of at least $15,000 per person and $30,000 per accident, payable regardless of fault; Delaware remains an at-fault state for liability.

21 Del. C. § 2118(a)(2); Delaware Department of Insurance — Auto insurance

Workers' compensation in Delaware

The Division of Industrial Affairs applies the requirement to almost every employer with one or more employees, counting full-time, part-time, seasonal and temporary staff, and expects the policy to be bound before work starts. Proprietors and partners start outside the system and may elect in; officers and LLC members start inside and may opt out in writing. Insurers report cancellations within 14 days, so a lapse is visible to the state almost immediately.

Auto liability in Delaware

Delaware pairs 25/50/10 liability with mandatory personal injury protection of 15/30, and requires proof of insurance to register a vehicle. It is an at-fault state despite the PIP requirement. Business vehicles are normally written at a $1M combined single limit because leases, platforms and contracts demand it.

Licensing in Delaware

Every business holds a state business license from the Division of Revenue; trades such as electrical, plumbing and HVACR are licensed by the Division of Professional Regulation, and non-resident contractors register and bond before working on larger projects. These are registrations and bonds, not insurance; general liability and auto remain the policies customers and general contractors ask to see.

How CoverMatch uses these rules

A Delaware business in the wallet is checked against these rules: workers' compensation the moment an employee is reported, the liability floor and PIP on scheduled vehicles, and the license and bond evidence that trade customers ask for. Each rule links to its source, and a licensed agent reviews this page before it publishes and whenever the rules change.

Sources

Questions people actually ask

Can a new Delaware business wait until payroll is running to buy workers' compensation?

No. Delaware expects coverage in place before the first employee's first day, and the insurer's lapse notices mean the Department of Labor sees gaps quickly.

Does Delaware license contractors at the state level?

Delaware issues a state business license through the Division of Revenue and requires non-resident contractors to register and bond on larger jobs; trade licenses such as electrical, plumbing and HVACR come from the Division of Professional Regulation. None of them replaces general liability, which customers ask to see.

Is uninsured motorist coverage required in Delaware?

Insurers must offer uninsured and underinsured motorist coverage at the liability limits and you can decline it in writing. Most business policies keep it because the cost is small relative to a loss caused by an uninsured driver.

By business type in Delaware