Massachusetts small business insurance requirements: workers' compensation for every employer, 25/50/30 auto limits since July 2025 and home improvement registration

Massachusetts: what the state requires of a small business

QUICK ANSWER

In Massachusetts, every employer must provide workers' compensation for its employees, part-time included, and no city or town may issue a license or permit without proof of coverage; compulsory auto coverage is $25,000 per person, $50,000 per accident and $30,000 property damage for policies issued or renewed on or after July 1, 2025, with $8,000 of personal injury protection; and home improvement contractors must register with the Office of Consumer Affairs and Business Regulation.

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

Massachusetts rules with sources
Topic	The rule in Massachusetts	Source
Workers' compensation	Every employer must provide workers' compensation for its employees from the first hire, full-time or part-time, through an insurer or approved self-insurance; the only general exclusion is an owner-occupant of a dwelling of three or fewer units hiring help for its upkeep. Corporate officers who own at least 25% may exempt themselves; sole proprietors and partners are not employees unless they elect coverage.	M.G.L. c. 152, §§ 1(5), 25A; Department of Industrial Accidents — Employer's guide to workers' compensation
Proof for licenses and permits; penalties	No license or permit required by a city or town may be issued without an affidavit or certificate of workers' compensation coverage; failure to insure brings a stop-work order with daily fines and criminal penalties of up to $1,500 and one year in prison.	M.G.L. c. 152, § 25C; Department of Industrial Accidents — Workers' compensation insurance affidavit
Compulsory auto coverage	Bodily injury to others $25,000 per person / $50,000 per accident, damage to someone else's property $30,000, personal injury protection $8,000 per person and uninsured motorist bodily injury $20,000 / $40,000, for policies issued or renewed on or after July 1, 2025 (previously 20/40/5).	M.G.L. c. 90, § 34A, as amended in 2024; Massachusetts Division of Insurance — Compulsory auto coverages
Home improvement contractors	Contractors and subcontractors doing residential improvement work on one-to-four-unit owner-occupied homes must register as Home Improvement Contractors with the Office of Consumer Affairs and Business Regulation, renew every two years and contribute to the Residential Contractor's Guaranty Fund; registration does not itself require insurance, and structural work also needs a Construction Supervisor License.	M.G.L. c. 142A; Office of Consumer Affairs and Business Regulation — Home Improvement Contractor registration

Topic

The rule in Massachusetts

Source

Workers' compensation

Every employer must provide workers' compensation for its employees from the first hire, full-time or part-time, through an insurer or approved self-insurance; the only general exclusion is an owner-occupant of a dwelling of three or fewer units hiring help for its upkeep. Corporate officers who own at least 25% may exempt themselves; sole proprietors and partners are not employees unless they elect coverage.

M.G.L. c. 152, §§ 1(5), 25A; Department of Industrial Accidents — Employer's guide to workers' compensation

Proof for licenses and permits; penalties

No license or permit required by a city or town may be issued without an affidavit or certificate of workers' compensation coverage; failure to insure brings a stop-work order with daily fines and criminal penalties of up to $1,500 and one year in prison.

M.G.L. c. 152, § 25C; Department of Industrial Accidents — Workers' compensation insurance affidavit

Compulsory auto coverage

Bodily injury to others $25,000 per person / $50,000 per accident, damage to someone else's property $30,000, personal injury protection $8,000 per person and uninsured motorist bodily injury $20,000 / $40,000, for policies issued or renewed on or after July 1, 2025 (previously 20/40/5).

M.G.L. c. 90, § 34A, as amended in 2024; Massachusetts Division of Insurance — Compulsory auto coverages

Home improvement contractors

Contractors and subcontractors doing residential improvement work on one-to-four-unit owner-occupied homes must register as Home Improvement Contractors with the Office of Consumer Affairs and Business Regulation, renew every two years and contribute to the Residential Contractor's Guaranty Fund; registration does not itself require insurance, and structural work also needs a Construction Supervisor License.

M.G.L. c. 142A; Office of Consumer Affairs and Business Regulation — Home Improvement Contractor registration

Workers' compensation in Massachusetts

Massachusetts covers every employer and enforces it through the permit system: a town cannot issue a license or permit without the Department of Industrial Accidents affidavit or a certificate. Part-time staff count from day one. Officers owning a quarter or more of a corporation may exempt themselves; proprietors and partners are outside unless they elect in. Stop-work orders carry daily fines, and uninsured employers face criminal penalties.

Auto liability in Massachusetts

The 2024 law raised the compulsory limits for the first time since 1988: 25/50/30 with $8,000 PIP and 20/40 uninsured motorist bodily injury, for policies issued or renewed from July 1, 2025. Massachusetts is a no-fault state for injury benefits. Commercial vehicles are normally written at a $1M combined single limit because leases, platforms and contracts require it.

Home improvement contractors in Massachusetts

Residential improvement work on owner-occupied homes of one to four units requires Home Improvement Contractor registration, renewed every two years, with a Guaranty Fund contribution that pays homeowners when a contractor fails. Registration does not include insurance; structural work also needs a Construction Supervisor License; and electricians, plumbers and gas fitters are licensed by their own boards.

How CoverMatch uses these rules

A Massachusetts business in the wallet is checked against these rules: workers' compensation from the first employee, the compulsory auto package on scheduled vehicles, and the registration and license evidence for residential contracting classes. 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

Why does my Massachusetts town want a workers' compensation affidavit for a food permit?

Because state law bars municipalities from issuing any license or permit without proof of coverage. Businesses with no employees sign the affidavit saying so; everyone else attaches a certificate.

Did the Massachusetts auto minimums change recently?

Yes. For policies issued or renewed on or after July 1, 2025, the compulsory limits rose from 20/40/5 to 25/50/30. Personal injury protection stayed at $8,000. Business vehicles are usually written well above both.

Is the Home Improvement Contractor registration a license to build?

No. It is a consumer-protection registration with a guaranty fund. Structural work needs a Construction Supervisor License, and customers, lenders and towns still ask for a general liability certificate.

By business type in Massachusetts