A Maryland workers comp exemption lets certain business owners legally go without workers’ compensation coverage on themselves — Sole proprietors and partners are not covered by default, so they don’t need to file anything to stay out; they can choose to opt in.
Corporate officers and LLC members are covered by default if they are paid, but certain ones may elect out under Lab. & Empl. §9-206: officers of a close corporation (no ownership minimum is stated in the snippets I found); officers who own at least 20% of a professional corporation’s stock and perform professional services for it;
officers who own at least 20% of a corporation that earns at least 75% of its income from farm operations; officers of other corporations, but no more than 5 officers per corporation; and LLC members who own at least 20% of the LLC’s profits interests.
Confirm your eligibility with the Maryland Workers’ Compensation Commission and a licensed attorney. — while the law still requires coverage for employees once a business has 1 or more. This guide explains who qualifies for the Maryland workers comp exemption, the exact form, where to file it, what it costs, and what an exempt owner gives up. Verified against Maryland sources as of October 2026.
Maryland at a Glance
| Coverage required at | 1 employee(s) |
| Who may elect out | Sole proprietors and partners are not covered by default, so they don’t need to file anything to stay out; they can choose to opt in. Corporate officers and LLC members are covered by default if they are paid, but certain ones may elect out under Lab. & Empl. §9-206: officers of a close corporation (no ownership minimum is stated in the snippets I found); officers who own at least 20% of a professional corporation’s stock and perform professional services for it; officers who own at least 20% of a corporation that earns at least 75% of its income from farm operations; officers of other corporations, but no more than 5 officers per corporation; and LLC members who own at least 20% of the LLC’s profits interests. Confirm your eligibility with the Maryland Workers’ Compensation Commission and a licensed attorney. |
| Filed with | Maryland Workers’ Compensation Commission, online only through the CompHub portal at https://comphub.wcc.state.md.us/Web/Public/Exclusion. Under §9-206, the corporation or LLC must also give written notice to its workers’ comp insurer. |
| Filing fee | $0 (no filing fee was found in the sources I reviewed; I couldn’t open the WCC fee page itself, so confirm with the Commission) |
In This Maryland Guide:
Who Qualifies for A Maryland Workers Comp Exemption
Sole proprietors and partners are not covered by default, so they don’t need to file anything to stay out; they can choose to opt in.
Corporate officers and LLC members are covered by default if they are paid, but certain ones may elect out under Lab. & Empl. §9-206: officers of a close corporation (no ownership minimum is stated in the snippets I found); officers who own at least 20% of a professional corporation’s stock and perform professional services for it;
officers who own at least 20% of a corporation that earns at least 75% of its income from farm operations; officers of other corporations, but no more than 5 officers per corporation; and LLC members who own at least 20% of the LLC’s profits interests.
Confirm your eligibility with the Maryland Workers’ Compensation Commission and a licensed attorney.
Lab. & Empl. §9-206. A paid corporate officer or LLC member is a covered employee unless they make an exemption election. An eligible officer may elect out (close-corporation officer; at least 20% stockholder of a professional corporation who performs professional services; at least 20% stockholder of a corporation earning at least 75% of its income from farm operations; no more than 5 officers per corporation in the general category).
The election takes effect only after the corporation or LLC gives the Commission and its insurer written notice naming the excluded individual.
LLC members (§9-206) are covered if paid, but a member who owns at least 20% of the LLC’s profits interests may elect out by filing the exclusion with the Commission and notifying the insurer. Partners and sole proprietors (§9-219 and §9-227, as cited on the WCC’s own form) are excluded from coverage by default and may elect to become covered.
A sole proprietor must devote full time to the business to opt in, and the opt-in takes effect only after written notice to the Commission and the insurer.
How to File the Maryland Workers Comp Exemption
Maryland does not use a separate state form; the election is made with the insurer on the policy. It is filed with Maryland Workers’ Compensation Commission, online only through the CompHub portal at https://comphub.wcc.state.md.us/Web/Public/Exclusion. Under §9-206, the corporation or LLC must also give written notice to its workers’ comp insurer..
The fee is $0 (no filing fee was found in the sources I reviewed; I couldn’t open the WCC fee page itself, so confirm with the Commission). Filing on the state’s own site costs nothing beyond any statutory fee — the “exemption filing services” that advertise on this search charge for the same form.
Maryland Workers Comp Exemption Rules at a Glance
The exact Maryland workers comp exemption rules every owner should check before deciding to go without coverage:
| Employee threshold | 1 |
| Who may elect out | Sole proprietors and partners are not covered by default, so they don’t need to file anything to stay out; they can choose to opt in. Corporate officers and LLC members are covered by default if they are paid, but certain ones may elect out under Lab. & Empl. §9-206: officers of a close corporation (no ownership minimum is stated in the snippets I found); officers who own at least 20% of a professional corporation’s stock and perform professional services for it; officers who own at least 20% of a corporation that earns at least 75% of its income from farm operations; officers of other corporations, but no more than 5 officers per corporation; and LLC members who own at least 20% of the LLC’s profits interests. Confirm your eligibility with the Maryland Workers’ Compensation Commission and a licensed attorney. |
| Corporate officers | Lab. & Empl. §9-206. A paid corporate officer or LLC member is a covered employee unless they make an exemption election. An eligible officer may elect out (close-corporation officer; at least 20% stockholder of a professional corporation who performs professional services; at least 20% stockholder of a corporation earning at least 75% of its income from farm operations; no more than 5 officers per corporation in the general category). The election takes effect only after the corporation or LLC gives the Commission and its insurer written notice naming the excluded individual. |
| LLC members and partners | LLC members (§9-206) are covered if paid, but a member who owns at least 20% of the LLC’s profits interests may elect out by filing the exclusion with the Commission and notifying the insurer. Partners and sole proprietors (§9-219 and §9-227, as cited on the WCC’s own form) are excluded from coverage by default and may elect to become covered. A sole proprietor must devote full time to the business to opt in, and the opt-in takes effect only after written notice to the Commission and the insurer. |
| Where to file | Maryland Workers’ Compensation Commission, online only through the CompHub portal at https://comphub.wcc.state.md.us/Web/Public/Exclusion. Under §9-206, the corporation or LLC must also give written notice to its workers’ comp insurer. |
| Fee | $0 (no filing fee was found in the sources I reviewed; I couldn’t open the WCC fee page itself, so confirm with the Commission) |
What A Maryland Workers Comp Exemption Gives Up
An exempt owner who is hurt on the job in Maryland has no workers’ comp claim: no medical coverage from the policy, no wage replacement and no disability award. Health insurance may exclude work injuries. Most owners who physically work the job keep themselves covered for that reason.
One honest paragraph on the “ghost policy”: a minimum-premium policy with no employees sold to owners who need a certificate of insurance. It is legal in many states, but it is not a Maryland workers comp exemption — it is coverage with nobody on it. If you add a worker, it must be reported, or the audit will find them.
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Workers Exempt by Law in Maryland
Separate from the owner’s election, Maryland law exempts some classes of workers from coverage — commonly domestic workers below a threshold, casual labor, some farm labor and licensed real-estate agents paid by commission. A worker who does not fit a listed class counts toward the threshold, no matter what the 1099 says.
Proving A Maryland Workers Comp Exemption or Coverage
General contractors and clients in Maryland ask for proof before work starts: a certificate of insurance for covered employers, or the filed exemption certificate for exempt owners. Many states also run a public coverage-verification lookup on the agency site.
Why the Maryland Workers Comp Exemption Matters
The Maryland workers comp exemption is a trade: lower cost today against no safety net if you are hurt. The second half of the trade is the one the search results never lead with. Maryland reverses the usual approach for owners. Sole proprietors and partners start out not covered and must opt in, while paid corporate officers and LLC members start out covered and must opt out.
The exclusion counts only after the Commission has it through CompHub and the insurer has been notified; paper filings have not been accepted since November 30, 2023. A 2009 bill (HB 345) would have required notarized opt-out notices from sole proprietors, but it failed, so it is not Maryland law. Confirm details with the Commission and a licensed attorney.
If the Maryland workers comp exemption rules above leave any doubt about whether a worker counts, ask the state agency before you decide — the answer is free, and the penalty for guessing wrong is not.
Employer side: the Maryland requirements guide covers the threshold, who counts and the penalties in full. Hurt while exempt? You may still have a claim against a third party — a licensed attorney can say.
Frequently Asked Questions
Who can file a workers comp exemption in Maryland?
Sole proprietors and partners are not covered by default, so they don’t need to file anything to stay out; they can choose to opt in.
Corporate officers and LLC members are covered by default if they are paid, but certain ones may elect out under Lab. & Empl. §9-206: officers of a close corporation (no ownership minimum is stated in the snippets I found); officers who own at least 20% of a professional corporation’s stock and perform professional services for it;
officers who own at least 20% of a corporation that earns at least 75% of its income from farm operations; officers of other corporations, but no more than 5 officers per corporation; and LLC members who own at least 20% of the LLC’s profits interests.
Confirm your eligibility with the Maryland Workers’ Compensation Commission and a licensed attorney.
What form is the Maryland workers comp exemption?
The election is made on the policy or with the agency — see the table. File it on the state’s own site; filing services charge for the same form.
Can an exempt owner in Maryland still collect benefits if hurt?
No. An exemption removes the owner from coverage, so there is no claim for medical care or lost wages. That is the trade.
Official Maryland Sources & Resources
- Maryland Maryland Workers’ Compensation Commission: https://www.wcc.state.md.us/
- Maryland Workers’ Comp Statute: https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gle§ion=9-206
- U.S. Department of Labor — Workers’ Comp: dol.gov
- Insurance Information Institute: iii.org
This Maryland workers comp exemption guide was last verified against official Maryland sources in October 2026. Rules change — confirm the current figure with the state agency or a licensed attorney.
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Disclaimer: This guide is informational only and is not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm or insurer. Workers’ comp benefits, settlement values, deadlines, and requirements vary by state and by the specific facts of your injury and change over time, and any settlement figures here are illustrative only.
Confirm your rights and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.