Indiana small business insurance requirements: workers' compensation for one employee and 25/50/25 auto limits

Indiana: what the state requires of a small business

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In Indiana, any employer with one or more employees, full-time, part-time or seasonal, must carry workers' compensation with an authorized carrier or prove to the Worker's Compensation Board that it can pay claims itself; an uninsured employer owes double compensation and faces penalties and a possible order to stop doing business; and every registered vehicle must carry at least $25,000 per person, $50,000 per accident and $25,000 property damage liability.

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

Indiana rules with sources
Topic	The rule in Indiana	Source
Workers' compensation	Every employer with one or more employees must carry workers' compensation with an authorized insurer or be approved by the Worker's Compensation Board to self-insure; there is no headcount threshold and part-time and seasonal workers count. Sole proprietors, partners and LLC members are excluded unless they elect in; corporate officers are employees unless they file a written exemption with the carrier and the Board.	IC 22-3-2-2, IC 22-3-5-1 and IC 22-3-6-1; Worker's Compensation Board of Indiana — Employer information
Penalty for being uninsured	An uninsured employer is liable for double the compensation otherwise due, commits a Class A infraction, can be assessed civil penalties and daily amounts per uncovered employee, and may be ordered by a court to stop doing business until insured.	IC 22-3-4-13 and IC 22-3-5-1; Worker's Compensation Board of Indiana — Compliance
Independent contractors	A worker who is genuinely independent may obtain a Worker's Compensation Exemption Certificate through the Department of Revenue and the Board; without it, a hiring business should expect the worker to be treated as an employee for coverage purposes.	IC 22-3-2-14.5; Indiana Department of Revenue — Worker's Compensation Exemption Certificate
Auto liability minimums	Bodily injury $25,000 per person / $50,000 per accident and property damage $25,000; proof of financial responsibility may also be met by bond or deposit, and drivers caught without it face suspension and an SR-22 filing requirement.	IC 9-25-4-5; Indiana Bureau of Motor Vehicles — Insurance requirements

Topic

The rule in Indiana

Source

Workers' compensation

Every employer with one or more employees must carry workers' compensation with an authorized insurer or be approved by the Worker's Compensation Board to self-insure; there is no headcount threshold and part-time and seasonal workers count. Sole proprietors, partners and LLC members are excluded unless they elect in; corporate officers are employees unless they file a written exemption with the carrier and the Board.

IC 22-3-2-2, IC 22-3-5-1 and IC 22-3-6-1; Worker's Compensation Board of Indiana — Employer information

Penalty for being uninsured

An uninsured employer is liable for double the compensation otherwise due, commits a Class A infraction, can be assessed civil penalties and daily amounts per uncovered employee, and may be ordered by a court to stop doing business until insured.

IC 22-3-4-13 and IC 22-3-5-1; Worker's Compensation Board of Indiana — Compliance

Independent contractors

A worker who is genuinely independent may obtain a Worker's Compensation Exemption Certificate through the Department of Revenue and the Board; without it, a hiring business should expect the worker to be treated as an employee for coverage purposes.

IC 22-3-2-14.5; Indiana Department of Revenue — Worker's Compensation Exemption Certificate

Auto liability minimums

Bodily injury $25,000 per person / $50,000 per accident and property damage $25,000; proof of financial responsibility may also be met by bond or deposit, and drivers caught without it face suspension and an SR-22 filing requirement.

IC 9-25-4-5; Indiana Bureau of Motor Vehicles — Insurance requirements

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Workers' compensation in Indiana

Indiana requires coverage from the first employee and treats part-time and seasonal staff the same as full-time. Owners of unincorporated businesses and LLC members are outside unless they elect in; corporate officers are inside unless they file out. The exemption certificate for independent contractors is the state's answer to misclassification: without it, the Board is likely to treat a solo subcontractor as your employee after an injury. Penalties are severe, including double compensation and a court order to stop operating.

Auto liability in Indiana

The minimum is 25/50/25 and Indiana does not require personal injury protection. Business vehicles are usually written at a $1M combined single limit, the figure that general contractors, delivery platforms and property managers write into their contracts.

Licensing in Indiana

Indiana has no state-wide general contractor license; plumbers are licensed by the Professional Licensing Agency and most other trades are licensed and bonded by cities and counties, each with its own insurance evidence. Check the local requirement where the work is done, and keep a general liability certificate ready because every permitting office asks for it.

How CoverMatch uses these rules

An Indiana business in the wallet is checked against these rules: workers' compensation as soon as an employee is reported, auto limits on scheduled vehicles, and the local bond and liability evidence that permitting offices ask contractors 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

Does an Indiana S-corporation with two officer-owners and no staff need workers' compensation?

Officers are employees by default, so a policy is required unless each officer files the written exemption with the insurer and the Board. Once anyone else is hired, coverage is required regardless.

What happens if an Indiana employee is hurt while we are uninsured?

The employer owes the claim plus an equal amount as a penalty, can be fined, and a court can order the business closed until it is insured. The Board also files claims against the uninsured employer directly.

Does Indiana require personal injury protection on auto policies?

No. Indiana is an at-fault state; liability at 25/50/25 is the only mandatory coverage, and uninsured motorist coverage must be offered but may be rejected in writing.

By business type in Indiana