Vermont small business insurance requirements: workers' compensation for every employer, 25/50/10 auto limits and higher uninsured motorist coverage

Vermont: what the state requires of a small business

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In Vermont, every employer with one or more employees must secure workers' compensation through an authorized insurer or Department of Labor-approved self-insurance, with corporations and LLCs able to exclude up to four officers or members only by filing Form 29; every registered vehicle must carry at least $25,000 per person, $50,000 per accident and $10,000 property damage liability, plus uninsured and underinsured motorist coverage of $50,000 per person, $100,000 per accident and $10,000 property damage.

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

Vermont rules with sources
Topic	The rule in Vermont	Source
Workers' compensation	Every employer with one or more employees must secure the payment of compensation by insuring with an authorized carrier or by Department of Labor-approved self-insurance; there is no headcount threshold and part-time and seasonal workers count. Sole proprietors and partners are not employees unless they elect coverage; a corporation or LLC may exclude up to four executive officers or members by filing Form 29 with the Department.	21 V.S.A. § 601(3) and § 687; Vermont Department of Labor — Workers' compensation for employers
Penalty and reporting	An uninsured employer faces an administrative penalty for each day without coverage, a stop-work order and liability for benefits; employers must file a First Report of Injury within 72 hours of a work injury that requires medical attention or lost time.	21 V.S.A. § 692 and § 701; Vermont Department of Labor — Workers' compensation for employers
Auto liability minimums	Bodily injury $25,000 per person / $50,000 per accident and property damage $10,000 on every registered vehicle; Vermont is an at-fault state with no personal injury protection requirement.	23 V.S.A. § 800 and § 801; Vermont Department of Motor Vehicles — Insurance requirements
Uninsured and underinsured motorist coverage	Every Vermont auto policy must include uninsured and underinsured motorist coverage of at least $50,000 per person, $100,000 per accident for bodily injury and $10,000 for property damage, higher than the liability minimums.	23 V.S.A. § 941; Vermont Department of Financial Regulation — Auto insurance

Topic

The rule in Vermont

Source

Workers' compensation

Every employer with one or more employees must secure the payment of compensation by insuring with an authorized carrier or by Department of Labor-approved self-insurance; there is no headcount threshold and part-time and seasonal workers count. Sole proprietors and partners are not employees unless they elect coverage; a corporation or LLC may exclude up to four executive officers or members by filing Form 29 with the Department.

21 V.S.A. § 601(3) and § 687; Vermont Department of Labor — Workers' compensation for employers

Penalty and reporting

An uninsured employer faces an administrative penalty for each day without coverage, a stop-work order and liability for benefits; employers must file a First Report of Injury within 72 hours of a work injury that requires medical attention or lost time.

21 V.S.A. § 692 and § 701; Vermont Department of Labor — Workers' compensation for employers

Auto liability minimums

Bodily injury $25,000 per person / $50,000 per accident and property damage $10,000 on every registered vehicle; Vermont is an at-fault state with no personal injury protection requirement.

23 V.S.A. § 800 and § 801; Vermont Department of Motor Vehicles — Insurance requirements

Uninsured and underinsured motorist coverage

Every Vermont auto policy must include uninsured and underinsured motorist coverage of at least $50,000 per person, $100,000 per accident for bodily injury and $10,000 for property damage, higher than the liability minimums.

23 V.S.A. § 941; Vermont Department of Financial Regulation — Auto insurance

Workers' compensation in Vermont

Vermont covers every employer from the first employee, including part-time and seasonal staff. Owners of unincorporated businesses are outside unless they elect in; corporate officers and LLC members are employees unless the business files Form 29 to exclude up to four of them. Daily penalties and stop-work orders enforce the rule, and injuries are reported within 72 hours.

Auto liability in Vermont

The liability minimum is 25/50/10 with no personal injury protection, but every policy carries uninsured and underinsured motorist coverage of 50/100/10, higher than liability. Commercial vehicles are usually written at a $1M combined single limit because leases, platforms and client contracts require it.

Contractors in Vermont

Since 2023, residential contractors taking projects over $10,000 register with the Office of Professional Regulation, and electricians and plumbers are licensed by the Division of Fire Safety. Registration and licenses do not include insurance; a general liability certificate and the workers' compensation policy are what customers and towns ask for.

How CoverMatch uses these rules

A Vermont business in the wallet is checked against these rules: workers' compensation from the first employee or unexcluded officer, the liability and uninsured motorist package on scheduled vehicles, and the registration 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

Our Vermont LLC has three member-owners and no staff. Must we carry workers' compensation?

Members are employees of an LLC under Vermont law unless excluded, and up to four can be excluded by filing Form 29. File it, or carry a policy; once anyone else is hired a policy is required regardless.

Why are Vermont's uninsured motorist limits higher than the liability limits?

Vermont sets uninsured and underinsured motorist coverage at 50/100/10 by statute while liability starts at 25/50/10. Business vehicles are usually written at a $1M combined single limit for liability, and uninsured motorist coverage is set alongside it.

Does Vermont license contractors?

Vermont began registering residential contractors with the Office of Professional Regulation for projects over $10,000 in 2023; the registration does not itself require insurance, but customers and lenders ask for a general liability certificate, and workers' compensation applies from the first employee.

By business type in Vermont