Find workers' comp insurance quotes
Save money by comparing insurance quotes from multiple carriers.
Choose from the nation's best insurance providers
Maine workers' compensation insurance
Maine law requires every business with one employee or more to provide workers’ compensation insurance.
Who is required to have workers’ compensation insurance in Maine?
Every state has different requirements for workers’ compensation insurance. Businesses with employees in Maine are required to have workers’ compensation insurance. Even sole proprietors should consider buying coverage, as your health insurance provider might deny a claim for a work-related injury.
The state's workers' compensation statute is quite strict. It requires virtually all public and private-sector employers to provide workers’ compensation insurance. The law defines employers as follows: “private employers, the state, counties, cities, towns, water districts, other quasi-public corporations, municipal school committees, and design professionals.”
Employers that are exempt from workers’ comp requirements include:
- Firms involved in agriculture or aquaculture that employ seasonal or casual workers, as long as they maintain at least $25,000 in employer's liability insurance and at least $5,000 in medical coverage.
- Employers in the above industries that have six or fewer laborers, as long as they maintain employer's liability insurance with at least $100,000 in coverage for each full-time equivalent employee (FTE). They must also have $5,000 in medical payment coverage for each FTE.
- People who employ domestic servants in their homes.
Is workers' compensation coverage required for business owners in Maine?
In general, you must include yourself in your company’s workers’ comp insurance, with three exceptions:
- You’re the sole proprietor of a business that has no employees. You don’t need to file a waiver form to secure this exemption. But if you have employees, you must carry workers’ compensation.
- You’re the parent, spouse, or child of a sole proprietor, a business partner, or a bona fide owner of 20% of a firm. If any of these situations apply, you’re allowed to waive workers’ comp by making a written request.
- You’re a member of a limited liability company (LLC). No written waiver is needed to opt out. The parent, spouse, and / or the child of an LLC member who is also employed by the company may waive the firm’s workers’ comp insurance by filing a written waiver.
Find workers' compensation quotes for Maine businesses
How are corporate officers treated for workers’ comp purposes?
Corporate officers who own at least a 20% interest in the outstanding voting stock of a corporation can file for an exemption with the Maine Workers’ Compensation Board (WCB).
Do independent contractors in Maine need workers' comp?
Workers in the state of Maine are normally considered employees for tax purposes. This means you will be required to provide them with workers’ comp coverage.
However, if you hire independent contractors, you won’t have to give them workers’ comp insurance if the worker is not under your essential control while they perform duties on your behalf.
To protect yourself, you should ask independent contractors to provide written documentation that they have workers’ compensation. Asking for a certificate of insurance will meet this test.
Important: If you don’t do the prior step, your workers’ compensation insurer might consider the contractor’s employees to be your employees and include them in your payroll for workers’ comp premium-calculation purposes.
Maine law requires every business with one employee or more to provide workers’ compensation insurance.
What does workers' comp cover for Maine businesses?
Here are several examples of how workers' compensation insurance coverage helps pay expenses for injured workers:
- A retail store employee slips on a wet floor and hits their head. In this instance, workers' compensation would cover their emergency room trip, head MRI, and any following medical expenses during their recovery.
- A personal care aide develops a back injury from helping transfer and lift patients, and can no longer perform their duties. In this instance, workers' compensation would also provide retraining benefits so they could learn the skills to take on a new job.
- A project manager trips on a cord while visiting a job site and breaks their wrist. Workers' comp covers the cost of the ER visit, surgery, medications, and then two months of physical therapy to help them recover.
- A fast food worker burns themselves while preparing an order for a customer. Workers' comp covers their medical provider appointment and pain medication.
What does workers' compensation insurance not cover?
Additionally, here's what your workers' comp policy won't cover:
- Injuries caused by intoxication, drugs, or company policy violations
- Injuries claimed after a firing or layoff
- Wages for a replacement worker
- Occupational Safety and Health Administration (OSHA) fines
How much does workers' compensation insurance cost in Maine?
The average cost of workers’ compensation in Maine is $67 per month.
Your workers' comp premium is calculated based on a few factors, including:
- Payroll
- Location, such as Portland, Lewiston, Augusta, or Bangor
- Number of employees
- Industry and risk factors
- Coverage limits and exclusions
- Claims history
How is workers' compensation purchased in Maine?
Business owners in Maine have three choices when it comes to buying a workers' compensation policy:
- Private insurance companies. You could contact each workers' compensation insurance carrier independently to compare their products and rates, but that's where agents and brokers like Insureon come in. As the nation's leading digital insurance agency, Insureon partners with 30+ top-rated insurance carriers to deliver the right coverage for your business. Fill out an easy online application to get started.
- Self-insurance. Maine employers who qualify can self-insure their workers’ compensation claims. To apply for self-insurance status, firms must file an application with the Self-Insurance Division of the Maine Bureau of Insurance. To qualify, they must be financially sound and able to guarantee future workers’ comp claims and administrative expenses.
- The assigned risk residual market. If they’re unable to qualify, they can buy it from the state’s assigned risk residual market, Maine Employers’ Mutual Insurance Company (MEMIC), a competitive state fund. This is the insurance coverage of last resort for employers that are unable to qualify for standard coverage due to their high-risk status.
Verified workers' compensation insurance reviews
Hear from business owners like you who purchased workers' comp.
How are workers' comp premiums calculated?
Insurance providers use a specific formula for calculating workers' comp premiums:
Here's a breakdown of this equation:
- The classification rate reflects your employees' risk. Each worker has a classification code for the type of work they do. Insurers look up those codes in a database to find the associated rate, which is lower for office workers and higher for carpenters, tree trimmers, and others with a higher rate of injuries. Like other states, Maine relies on the National Council on Compensation Insurance (NCCI) database.
- The experience modification rate (EMR) reflects your business's risk. The average experience modification rate is 1.0, which means a business is similar in risk to others in its profession. Higher EMRs reflect higher risks, such as a history of claims. The EMR only comes into play for annual workers' comp premiums of at least $5,000, so it's not a factor for many small business owners.
- The insurer multiplies these numbers with your payroll divided by 100 to come up with your workers' compensation rate. Workers' compensation audits are typically done each year to ensure your business pays the right premium for this coverage.
How can Maine business owners save money on workers' comp?
To save money on workers' comp insurance, it's important to make sure you classify your employees correctly. Employees with desk jobs or other jobs with a low risk of injury cost less to insure. This also helps you avoid misclassification fines.
In some cases, small business owners can choose to buy pay-as-you-go workers' compensation. This type of workers' comp policy has a low upfront premium, and lets you make payments based on your actual payroll instead of an estimated payroll. It's useful for businesses that hire seasonal help or have fluctuating numbers of employees.
A ghost policy is a cheap option in some states, however it's not allowed in Maine. A ghost policy is a workers' comp policy in name only. It provides no protection or medical benefits, but can fulfill contractual requirements for a workers' comp certificate at a reduced price.
Finally, a documented safety program can help lower workers' comp costs. A safer workplace means fewer accidents, which helps keep your premium low.
How does workers’ comp work in Maine?
Workers' compensation coverage helps pay medical bills and provides partial wage replacement when an employee is injured on the job or develops an occupational illness.
Most policies include employer's liability insurance, which helps cover legal expenses if an employee blames their employer for an injury. However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer if they accept workers' comp benefits.
Under the Maine Workers' Compensation Act, workers' compensation benefits include:
- Medical treatment for injured workers
- Total incapacity benefits
- Partial incapacity benefits
- Vocational rehabilitation
- Death benefits
The employer is allowed to choose the employee's healthcare provider for the first 10 days. After that, the employee can choose their own provider. For details, visit the Maine.gov workers' compensation FAQ.
What are the penalties for not having workers’ comp insurance in Maine?
If you operate your business without workers’ compensation insurance in Maine, you may be subject to penalties.
You may be responsible for workers’ compensation medical and death benefits out of your own pocket. Lacking insurance does not relieve you of this liability.
Furthermore, failing to provide workers’ comp may result in you:
- Being charged with a Class D crime
- Being hit with a civil penalty of up to $10,000 or 108% of the premium you would have normally paid for workers’ comp insurance (whichever is larger)
- Losing your corporate charter and / or your business license
Finally, if you encounter legal trouble for failing to maintain workers’ comp, your commercial liability insurance policy will provide no coverage for your defense.
Maine workers’ compensation laws for death benefits
If an employee dies as a result of a work-related injury or illness, the worker’s surviving spouse and dependent children will be eligible to receive death benefits. These include weekly payments to cover a portion of the deceased employee’s income, along with funeral and burial costs.
In Maine, the surviving spouse and dependent children are treated as “wholly dependent” when it comes to determining workers’ comp benefits. That means they automatically get a certain percentage of the deceased worker’s earnings.
Other family members are considered either wholly or partially dependent. The latter will only receive benefits if there are no wholly dependent surviving family members.
To be considered wholly dependent, the surviving spouse and children must have been:
- Living with the deceased employee when the injury occurred
- Living apart for a just cause or because the employee deserted the spouse
- Dependent on the deceased employee’s earnings
For children to be considered wholly dependent, they must be:
- Younger than age 18
- Younger than age 23 as long as they’re a full-time student
- Of any age, but also physically or mentally incapable of earning a living
Eligible survivors can get weekly death benefits amounting to two-thirds of the deceased employee’s average weekly wages. This amount can’t exceed the state’s average weekly wage.
For partially dependent survivors, the weekly benefit will be based on how much the person provided for each dependent.
Whether wholly or partially dependent, survivors can receive benefits for no longer than 500 weeks.
In Maine, dependents can also receive payment for reasonable burial costs, to a maximum of $4,000. The employer is also liable to pay for incidental expenses totaling $3,000 to the deceased employee’s estate.
Workers’ comp settlements in Maine
A workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that will close out a workers’ compensation claim. This benefits both the employee and the employer.
A settlement in a Maine workers’ compensation claim involves an injured or sick employee giving up the right to receive future workers’ comp benefits. In return, the person receives a lump-sum payment.
All settlements are subject to the approval of an administrative law judge at the Maine Workers’ Compensation Board. The person will approve your settlement in the following cases:
- It appears the settlement is in your best interests.
- You participated in the review process.
- If the settlement releases the insurer from making future medical payments, you and the insurer would not have struck a deal without this release.
Workers’ compensation statute of limitations in Maine
In Maine, the statute of limitations for workers’ comp claims is within two years from the time an employer is required to file a First Report of Injury for an employee missing one or more days of work. If no first report is required, then the statute of limitations is the date of the injury.
Get free workers’ comp quotes with Insureon
If you are ready to buy a workers' compensation policy, start a free application with Insureon to compare quotes from top-rated insurance carriers. A licensed insurance agent will help answer your questions and explain your coverage options. Once you find the right policy, you can usually begin coverage and get your certificate of insurance in less than 24 hours.
Updated: January 17, 2025
EXPLORE ON INSUREON
Workers' comp insurance for 1099 employeesWhat to do when your employee is injured at workOther recommended insurance policies for small businesses in MaineWhat is a minimum premium workers’ compensation policy?Compare workers’ comp rates by stateBest workers' compensation insurance for small businesses
SHARE THIS ARTICLE
