South Carolina small business insurance requirements: workers' compensation at four employees, 25/50/25 auto limits and the $5,000 contractor license line

South Carolina: what the state requires of a small business

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In South Carolina, an employer that regularly has four or more workers, full-time or part-time, must carry workers' compensation, unless its total payroll in the previous calendar year was under $3,000; every registered vehicle must carry at least $25,000 per person, $50,000 per accident and $25,000 property damage liability plus uninsured motorist coverage at the same limits; and general and residential contractors need a Contractor's Licensing Board license for projects over $5,000.

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

South Carolina rules with sources
Topic	The rule in South Carolina	Source
Workers' compensation	Any employer that regularly has four or more workers in the same business, full-time or part-time, family members included, must carry workers' compensation or qualify to self-insure; employers whose total annual payroll in the previous calendar year was under $3,000 are exempt regardless of headcount, as are agricultural, railway and certain other employers. The count is regular employment, not the number working at the moment of injury.	S.C. Code § 42-1-360 and § 42-1-130; South Carolina Workers' Compensation Commission — Coverage requirements
Penalty for being uninsured	An employer required to carry coverage that does not is liable for the injured worker's benefits, faces fines assessed by the Commission for each day without coverage, and may be enjoined from doing business until insured.	S.C. Code § 42-5-40; South Carolina Workers' Compensation Commission — Insurance and compliance
Auto liability minimums	Bodily injury $25,000 per person / $50,000 per accident and property damage $25,000, with uninsured motorist coverage required at limits equal to the liability limits carried; underinsured motorist coverage must be offered.	S.C. Code § 38-77-140 and § 38-77-150; South Carolina Department of Motor Vehicles — Insurance requirements
Contractor licensing	A general contractor license is required for commercial construction valued at $5,000 or more, and a residential builder license for residential work valued over $5,000, each issued by the Contractor's Licensing Board or Residential Builders Commission by classification and license group, with a financial statement or bond; specialty and mechanical trades have their own classifications.	S.C. Code § 40-11-30 and § 40-59-30; South Carolina Department of Labor, Licensing and Regulation — Contractor's Licensing Board

Topic

The rule in South Carolina

Source

Workers' compensation

Any employer that regularly has four or more workers in the same business, full-time or part-time, family members included, must carry workers' compensation or qualify to self-insure; employers whose total annual payroll in the previous calendar year was under $3,000 are exempt regardless of headcount, as are agricultural, railway and certain other employers. The count is regular employment, not the number working at the moment of injury.

S.C. Code § 42-1-360 and § 42-1-130; South Carolina Workers' Compensation Commission — Coverage requirements

Penalty for being uninsured

An employer required to carry coverage that does not is liable for the injured worker's benefits, faces fines assessed by the Commission for each day without coverage, and may be enjoined from doing business until insured.

S.C. Code § 42-5-40; South Carolina Workers' Compensation Commission — Insurance and compliance

Auto liability minimums

Bodily injury $25,000 per person / $50,000 per accident and property damage $25,000, with uninsured motorist coverage required at limits equal to the liability limits carried; underinsured motorist coverage must be offered.

S.C. Code § 38-77-140 and § 38-77-150; South Carolina Department of Motor Vehicles — Insurance requirements

Contractor licensing

A general contractor license is required for commercial construction valued at $5,000 or more, and a residential builder license for residential work valued over $5,000, each issued by the Contractor's Licensing Board or Residential Builders Commission by classification and license group, with a financial statement or bond; specialty and mechanical trades have their own classifications.

S.C. Code § 40-11-30 and § 40-59-30; South Carolina Department of Labor, Licensing and Regulation — Contractor's Licensing Board

Workers' compensation in South Carolina

South Carolina sets its threshold at four regular workers, counting part-time staff and family, with a separate exemption for employers whose prior-year payroll was under $3,000. The courts measure regular employment, not who happened to be working at the moment of injury, and a business that fluctuates around four is treated as covered when it regularly reaches it. Uninsured employers pay benefits directly, face daily fines and can be enjoined from operating.

Auto liability in South Carolina

The minimum is 25/50/25 with uninsured motorist coverage equal to the liability limits carried and underinsured motorist coverage offered. Commercial vehicles are usually written at a $1M combined single limit because general contractors, platforms and leases require it, and the matching uninsured motorist coverage then rises with it.

Contractors in South Carolina

Commercial construction valued at $5,000 or more needs a general contractor license and residential work valued over $5,000 a residential builder license, each by classification and group with a financial showing or bond. Neither license carries an insurance minimum, so the general liability certificate and the workers' compensation policy are what owners and permitting offices ask to see.

How CoverMatch uses these rules

A South Carolina business in the wallet is checked against these rules: workers' compensation once four regular workers are reported, the 25/50/25 floor with matching uninsured motorist coverage 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

My South Carolina restaurant has three employees and a weekend dishwasher. Am I over the line?

Yes. Part-time workers count, so four regular workers brings you under the Act. Many three-person businesses carry a policy anyway because the next hire, and most leases, make it necessary.

Does the $3,000 payroll exemption help a new business?

It looks back at the previous calendar year, so a business with no prior payroll or very little is outside the Act until it has four regular workers. Once it does, the Commission expects coverage.

Do South Carolina contractor licenses require insurance?

The license depends on classification, exam and a financial statement or bond rather than an insurance minimum, but owners, lenders and municipalities require a general liability certificate on licensed jobs, and workers' compensation applies under the four-employee rule.

By business type in South Carolina