Virginia small business insurance requirements: workers' compensation at three employees, 50/100/25 auto limits since 2025 and contractor license classes

Virginia: what the state requires of a small business

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In Virginia, an employer that regularly employs more than two part-time or full-time employees must carry workers' compensation, counting the employees of subcontractors doing its trade; vehicles need at least $50,000 per person, $100,000 per accident and $25,000 property damage liability on policies effective on or after January 1, 2025, with the uninsured motor vehicle fee abolished; and contractors need a Class A, B or C license from the Board for Contractors by project value.

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

Virginia rules with sources
Topic	The rule in Virginia	Source
Workers' compensation	An employer who regularly employs more than two part-time or full-time employees must carry workers' compensation; part-time, seasonal and family workers, minors and non-citizens count, and if the business hires subcontractors to perform its same trade or fulfil its contracts, the subcontractors' employees are included in the count. Coverage comes from an authorized insurer, a licensed group self-insurance association or Commission-approved self-insurance.	Va. Code § 65.2-101 and § 65.2-800; Virginia Workers' Compensation Commission — Employer coverage
Penalty for being uninsured	An employer that fails to insure is subject to a civil penalty of up to $250 per day, capped at $50,000 plus collection costs, loses the exclusive-remedy defense and is pursued by the Uninsured Employer's Fund for benefits paid.	Va. Code § 65.2-805; Virginia Workers' Compensation Commission — Insurance compliance
Auto liability minimums	Bodily injury $50,000 per person / $100,000 per accident and property damage $25,000 for policies effective on or after January 1, 2025 (30/60/20 from 2022 through 2024), with uninsured and underinsured motorist coverage at the same limits unless lower limits are requested in writing; the $500 uninsured motor vehicle fee that once allowed registration without insurance has been repealed.	Va. Code § 46.2-472 and § 38.2-2206, as amended by 2021 Acts c. 109 and 2023 Acts c. 538; Virginia DMV — Insurance requirements
Contractor license classes	Contractors are licensed by the Board for Contractors in three classes by project and annual value: Class C for single projects of $1,000 up to $10,000, Class B for $10,000 up to $120,000 and Class A for $120,000 or more, each with net worth, experience and pre-license education requirements; the license number must appear on contracts and advertising.	Va. Code § 54.1-1100 and § 54.1-1106 et seq.; Virginia Department of Professional and Occupational Regulation — Board for Contractors

Topic

The rule in Virginia

Source

Workers' compensation

An employer who regularly employs more than two part-time or full-time employees must carry workers' compensation; part-time, seasonal and family workers, minors and non-citizens count, and if the business hires subcontractors to perform its same trade or fulfil its contracts, the subcontractors' employees are included in the count. Coverage comes from an authorized insurer, a licensed group self-insurance association or Commission-approved self-insurance.

Va. Code § 65.2-101 and § 65.2-800; Virginia Workers' Compensation Commission — Employer coverage

Penalty for being uninsured

An employer that fails to insure is subject to a civil penalty of up to $250 per day, capped at $50,000 plus collection costs, loses the exclusive-remedy defense and is pursued by the Uninsured Employer's Fund for benefits paid.

Va. Code § 65.2-805; Virginia Workers' Compensation Commission — Insurance compliance

Auto liability minimums

Bodily injury $50,000 per person / $100,000 per accident and property damage $25,000 for policies effective on or after January 1, 2025 (30/60/20 from 2022 through 2024), with uninsured and underinsured motorist coverage at the same limits unless lower limits are requested in writing; the $500 uninsured motor vehicle fee that once allowed registration without insurance has been repealed.

Va. Code § 46.2-472 and § 38.2-2206, as amended by 2021 Acts c. 109 and 2023 Acts c. 538; Virginia DMV — Insurance requirements

Contractor license classes

Contractors are licensed by the Board for Contractors in three classes by project and annual value: Class C for single projects of $1,000 up to $10,000, Class B for $10,000 up to $120,000 and Class A for $120,000 or more, each with net worth, experience and pre-license education requirements; the license number must appear on contracts and advertising.

Va. Code § 54.1-1100 and § 54.1-1106 et seq.; Virginia Department of Professional and Occupational Regulation — Board for Contractors

Workers' compensation in Virginia

Virginia's threshold is more than two regular employees, and the Commission counts part-time, seasonal and family workers, minors, non-citizens and the employees of subcontractors doing the business's trade. Coverage comes from an authorized insurer, a group self-insurance association or approved self-insurance. Daily penalties reach $50,000, and the Uninsured Employer's Fund recovers what it pays from the uninsured employer.

Auto liability in Virginia

The 2021 law raised Virginia's minimum in two steps, to 30/60/20 from 2022 and 50/100/25 from January 1, 2025, and the uninsured motor vehicle fee that once let drivers register without insurance has been repealed. Uninsured and underinsured motorist limits track liability. Business vehicles are usually written at a $1M combined single limit, which is what federal contractors, general contractors and leases require.

Contractors in Virginia

The Board for Contractors licenses in three classes by project value: Class C from $1,000 to under $10,000, Class B to under $120,000 and Class A above that, each with net worth, experience and education requirements and the license number on every contract. Tradesmen such as electricians, plumbers and HVAC technicians hold individual licenses in addition to the firm's contractor license. None of these includes insurance, so the general liability certificate and workers' compensation policy are what owners ask for.

How CoverMatch uses these rules

A Virginia business in the wallet is checked against these rules: workers' compensation once reported employees and same-trade subcontractors exceed two, the 50/100/25 floor on scheduled vehicles, and the license class for construction work. 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 Virginia business has two employees and uses a subcontractor crew. Do I need workers' compensation?

Probably yes. Virginia adds the employees of subcontractors doing your trade or fulfilling your contracts to your own count, so two employees plus a one-person sub takes you over the line.

What changed with Virginia auto insurance in 2025?

Minimum limits rose to 50/100/25 for policies effective on or after January 1, 2025, uninsured motorist limits follow them, and the uninsured motor vehicle fee option no longer exists, so every registered vehicle must be insured.

Does a Virginia contractor license require insurance?

The Board looks at net worth, experience and education rather than an insurance minimum, but a general liability certificate is required by owners and localities on nearly every job and workers' compensation applies under the three-employee rule.

By business type in Virginia