North Carolina small business insurance requirements: workers' compensation at three employees, 50/100/50 auto limits since 2025 and the $40,000 contractor license line

North Carolina: what the state requires of a small business

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In North Carolina, a business that regularly employs three or more people, including part-time workers and corporate officers, must carry workers' compensation, with coverage required from the first employee where work involves radiation; vehicles need at least $50,000 per person, $100,000 per accident and $50,000 property damage liability on policies effective on or after January 1, 2025, with matching uninsured motorist coverage; and anyone undertaking construction worth $40,000 or more needs a general contractor license.

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

North Carolina rules with sources
Topic	The rule in North Carolina	Source
Workers' compensation	Every business that regularly employs three or more employees, counting part-time workers, corporate officers and LLC members, must carry workers' compensation or qualify to self-insure; employers whose work involves radiation are covered from one employee. Agricultural employers with fewer than ten regular non-seasonal workers, domestic servants and certain sawmill and logging operators are exempt.	N.C.G.S. § 97-2(1) and § 97-13; North Carolina Industrial Commission — Employer coverage requirements
Penalty for being uninsured	An uninsured employer faces a civil penalty of up to $100 per day of non-compliance, criminal charges that can reach a felony for willful failure, and personal liability of the responsible officers for benefits.	N.C.G.S. § 97-94; North Carolina Industrial Commission — Compliance and Fraud Investigations
Auto liability minimums	Bodily injury $50,000 per person / $100,000 per accident and property damage $50,000 for policies effective on or after January 1, 2025 (raised from 30/60/25 by S.L. 2023-133), with uninsured motorist coverage at the same limits and underinsured motorist coverage required on policies above the minimum.	N.C.G.S. § 20-279.21 as amended by S.L. 2023-133 (Senate Bill 452); North Carolina Department of Insurance — Auto insurance
General contractor license	Anyone who undertakes to construct or superintend construction where the undertaking reaches the $40,000 threshold must hold a license from the North Carolina Licensing Board for General Contractors in the proper classification and limitation, shown through a financial statement or bond.	N.C.G.S. § 87-1 and § 87-10; North Carolina Licensing Board for General Contractors

Topic

The rule in North Carolina

Source

Workers' compensation

Every business that regularly employs three or more employees, counting part-time workers, corporate officers and LLC members, must carry workers' compensation or qualify to self-insure; employers whose work involves radiation are covered from one employee. Agricultural employers with fewer than ten regular non-seasonal workers, domestic servants and certain sawmill and logging operators are exempt.

N.C.G.S. § 97-2(1) and § 97-13; North Carolina Industrial Commission — Employer coverage requirements

Penalty for being uninsured

An uninsured employer faces a civil penalty of up to $100 per day of non-compliance, criminal charges that can reach a felony for willful failure, and personal liability of the responsible officers for benefits.

N.C.G.S. § 97-94; North Carolina Industrial Commission — Compliance and Fraud Investigations

Auto liability minimums

Bodily injury $50,000 per person / $100,000 per accident and property damage $50,000 for policies effective on or after January 1, 2025 (raised from 30/60/25 by S.L. 2023-133), with uninsured motorist coverage at the same limits and underinsured motorist coverage required on policies above the minimum.

N.C.G.S. § 20-279.21 as amended by S.L. 2023-133 (Senate Bill 452); North Carolina Department of Insurance — Auto insurance

General contractor license

Anyone who undertakes to construct or superintend construction where the undertaking reaches the $40,000 threshold must hold a license from the North Carolina Licensing Board for General Contractors in the proper classification and limitation, shown through a financial statement or bond.

N.C.G.S. § 87-1 and § 87-10; North Carolina Licensing Board for General Contractors

Workers' compensation in North Carolina

North Carolina's threshold is three regularly employed people, counting part-time staff, officers and LLC members, with a one-employee rule where work involves radiation and exemptions for small farms, domestic help and certain sawmill and logging work. The Industrial Commission's compliance unit pursues uninsured employers with daily penalties and criminal referrals, and officers can be held personally liable for benefits.

Auto liability in North Carolina

Senate Bill 452 raised the minimum to 50/100/50 for policies effective on or after January 1, 2025, the first increase since 1999, with uninsured motorist coverage at the same limits. Commercial vehicles in North Carolina are usually written at a $1M combined single limit, which is what general contractors, delivery platforms and leases require.

Contractors in North Carolina

A general contractor license is required once an undertaking reaches the $40,000 threshold, issued by classification and limitation after a financial showing or bond. Plumbing, heating and electrical trades are licensed by their own boards. None of these licenses includes insurance, so a general liability certificate and the workers' compensation policy are what every owner and permitting office asks for.

How CoverMatch uses these rules

A North Carolina business in the wallet is checked against these rules: workers' compensation once three employees are reported, the 50/100/50 floor on scheduled vehicles, and the license line for construction 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

Do owners count toward North Carolina's three-employee threshold?

Corporate officers and LLC members count toward the three even when they exclude themselves from benefits. Sole proprietors and partners do not count and are not covered unless they elect in.

Did North Carolina's auto minimums change?

Yes. Policies effective on or after January 1, 2025 carry 50/100/50 minimums with matching uninsured motorist coverage, up from 30/60/25. Business vehicles are usually written at a $1M combined single limit above that.

Does the North Carolina general contractor license require insurance?

The license is based on classification and a financial showing rather than an insurance minimum, but owners, lenders and municipalities require a general liability certificate on virtually every licensed job, and workers' compensation applies under the three-employee rule.

By business type in North Carolina