If you're running a business in the District of Columbia, here's something you need to know right away: the moment you hire your first employee, you're legally required to have workers' compensation insurance. No grace period, no minimum headcount—just one employee is enough to trigger this requirement. And while that might sound like just another compliance headache, understanding DC's workers' comp rules can actually save you from serious financial and legal trouble down the road.
The good news? DC's workers' compensation system is relatively straightforward compared to other jurisdictions. You're not dealing with a state-run monopoly—you have options for coverage. The bad news? The penalties for getting it wrong are steep, and if you're one of those business owners who thinks you can skip this coverage, you could end up personally on the hook for medical bills and lost wages if an employee gets hurt.
Who Needs Workers' Compensation Insurance in DC?
Let's cut to the chase: if you have one or more employees in the District of Columbia, you need workers' compensation coverage. Period. This applies whether you're running a tech startup in Dupont Circle, managing a restaurant in Georgetown, or operating a construction company in Anacostia. The DC Department of Employment Services (DOES) doesn't mess around with this requirement.
Here's where DC stands out from most other places: the District has one of the most comprehensive coverage requirements in the country when it comes to domestic workers. If you employ someone in your home—a nanny, house cleaner, or home health aide—you need to provide workers' comp coverage once they work 240 hours or more during any calendar quarter. That's roughly 19 hours per week over a 13-week period. Most states either exempt domestic workers entirely or have higher thresholds, so this is an area where DC employers need to pay extra attention.
What about business owners? The rules get a bit more nuanced here. If you're a sole proprietor or partner, you're generally excluded from coverage unless you meet the legal definition of an employee, but you can choose to cover yourself if you want that protection. Corporate officers and LLC members, on the other hand, are automatically included in coverage—though you do have the option to elect out if you prefer. Most insurance professionals recommend keeping yourself covered, especially if you're actively involved in the day-to-day operations of your business.
Who's Exempt From Coverage Requirements?
Not everyone who does work for your business needs to be covered under your workers' compensation policy. The main exempt categories in DC include independent contractors, casual employees, unpaid volunteers, and government employees who are covered under separate federal or district systems.
Independent contractors are the big one that trips up a lot of business owners. Just because you call someone an independent contractor doesn't automatically make them one in the eyes of DC law. The Department of Employment Services looks at the actual working relationship—things like who controls how the work is done, whether the worker uses their own tools and equipment, and whether they work for other clients. If you misclassify an employee as an independent contractor and they get hurt, you could be facing penalties plus the full cost of their injury claim.
Casual employees are workers you employ irregularly or on an incidental basis—think of a neighbor's teenager you hire for a one-time yard cleanup, or someone who helps you move office furniture over a weekend. These workers don't need to be covered because they're not part of your regular business operations. But here's the tricky part: if that "casual" worker becomes regular or the work becomes ongoing, they might no longer qualify for the exemption.
How to Get Workers' Comp Coverage in DC
Unlike states like North Dakota, Ohio, Washington, and Wyoming—which force employers to buy coverage through state-run funds—DC operates on a competitive market model. This means you have several options for obtaining coverage, and you should absolutely shop around to find the best rates and service.
Most DC employers purchase workers' compensation insurance through private insurance carriers authorized to sell coverage in the District. Your premiums will be based on factors like your industry classification code, your payroll, and your claims history. If you run a low-risk office business, you'll pay significantly less than a roofing contractor or construction company.
If you're having trouble finding coverage in the private market—maybe because you're in a high-risk industry or you have a challenging claims history—you can access the District of Columbia Assigned Risk Pool, administered by the National Council on Compensation Insurance (NCCI). The assigned risk pool is basically the insurer of last resort. You'll typically pay higher premiums here, but it guarantees you can get the coverage you legally need.
There's also a third option: self-insurance. But before you get excited about potentially saving on premiums, understand that self-insurance in DC is only available to businesses that meet substantial financial requirements, including posting a significant bond. This option really only makes sense for larger, financially stable companies with the resources to manage claims internally and absorb the risk.
What Happens If You Don't Have Coverage?
This is where things get ugly. Failure to carry required workers' compensation insurance in DC can result in fines ranging from $1,000 to $10,000. And those are just the administrative penalties. The real financial nightmare happens when an employee gets injured while you're uninsured.
Without workers' comp coverage, you're personally responsible for all medical expenses, lost wages, rehabilitation costs, and potentially permanent disability benefits. Even worse, DC law allows for personal liability—meaning the employer and company officers like the president, secretary, and treasurer can each be held individually responsible for these costs. Your personal assets could be on the line, not just your business assets.
Plus, when you don't have workers' comp coverage, injured employees aren't limited to the workers' comp system—they can sue you directly in civil court for negligence. Workers' comp insurance exists partly to protect you from these lawsuits by providing a no-fault system where injured workers receive benefits without having to prove you did anything wrong. Take away that protection, and you're wide open to litigation.
Understanding Your Coverage Obligations
Workers' compensation in DC covers medical expenses, rehabilitation costs, and wage replacement benefits for employees who get injured or become ill due to their job. For 2025, the maximum weekly wage benefit is $1,808.66, with a minimum of $452.17—both amounts indexed to the District's average weekly wage and subject to annual adjustment.
Your workers' comp policy needs to cover all employees working in DC, even if your business is headquartered elsewhere. If you have remote workers or employees who travel between states, make sure your policy addresses multi-state coverage issues. This is something to discuss specifically with your insurance agent or broker.
The DC Office of Workers' Compensation, part of DOES, administers the program and handles disputes between injured workers and employers or their insurance carriers. They process claims, approve settlements, monitor compliance, and assess penalties when businesses fail to maintain coverage. If a worker files a claim, the system provides mediation services to resolve disputes without lengthy litigation.
Getting Started With Workers' Comp Coverage
If you're starting a new business in DC or you've just realized you're operating without required coverage, don't panic—but do act quickly. Start by reaching out to insurance agents or brokers who specialize in commercial insurance and workers' compensation. They'll ask about your business operations, number of employees, payroll, and the type of work your employees do. This information determines your classification code and premium rates.
Get quotes from multiple carriers. Premiums can vary significantly between insurers, even for the same coverage, and some carriers specialize in certain industries or business sizes. Ask about safety programs and loss control services—many insurers offer resources to help you prevent workplace injuries, which can lead to lower premiums over time through better claims experience.
Workers' compensation insurance isn't optional in DC—it's a fundamental part of being a responsible employer. Beyond keeping you compliant with the law, it protects your business from potentially catastrophic financial liability and ensures your employees have access to medical care and income support if they're injured on the job. Take the time to understand your obligations, shop for competitive coverage, and maintain that coverage continuously. Your employees and your business both depend on it.
