Do I Need Workers Comp Insurance for My Small Business in South Carolina?
As a general rule, South Carolina businesses that regularly employ four or more people within South Carolina must maintain workers’ compensation coverage, subject to exemptions. Part-time workers and family members count; confirm how seasonal workers and other circumstances apply. Failure to maintain required coverage can lead to penalties and other consequences. Review your workers comp policy with us.
Last reviewed: June 2026. Updated October 31, 2026.
Do South Carolina Small Businesses Need Workers Comp Insurance?
Generally, businesses that regularly employ four or more employees in South Carolina must carry coverage, subject to exemptions. SC Code Title 42 sets out the rule and exemptions. Employees counted can include:
- Full-time employees
- Part-time employees
- Seasonal workers, depending on the employment circumstances
- Family members on payroll
A Greenville restaurant that regularly employs two full-time cooks and two part-time servers generally needs coverage, subject to exemptions. One exemption may apply if total annual payroll in the previous calendar year was less than $3,000, regardless of the number of people employed. Other exemptions can also apply.
SC Workers Comp Requirement at a Glance
- General rule: 4 or more regularly employed employees, subject to exemptions
- Payroll exemption: total annual payroll under $3,000 in the previous calendar year
- Governing law: SC Code Title 42
- Regulatory body: SC Workers’ Compensation Commission
Who Is Exempt from Workers Comp in South Carolina?
| Exempt Category | Details |
|---|---|
| Fewer than 4 employees | Can still purchase voluntarily. Many do because clients or GCs require proof of coverage. See our guide for self-employed workers. |
| Sole proprietors, partners, LLC members | Sole proprietors are exempt from workers comp for themselves in many South Carolina small-business setups, but they can elect to be included in their own policy. Contracts, general contractors, or job-site requirements may still ask for proof of coverage even when the owner is not required to cover themselves. |
| Corporate officers | Automatically included but can file to opt out. |
| Independent contractors | Not covered under your policy. But paying someone on a 1099 does NOT automatically make them an IC. The SC WCC uses the right-of-control test. |
| Agricultural employees | Exempt under SC law. |
| Other exempt categories | Casual workers, state/county fair associations, railroads (FELA), federal employees (FECA), owner-operator motor carriers, commission-based real estate agents. |
The Gray Area: Subcontractors and the Statutory Employee Doctrine
This is where many Greenville businesses get caught. Under the statutory employee doctrine, if you hire a subcontractor who does not carry workers comp and one of their employees gets hurt on your job, responsibility can depend on the facts and applicable law. For a deep dive, read our workers comp guide for contractors in SC.
A subcontractor’s worker may be treated as your statutory employee when applicable legal conditions are met. For general contractors in the Greenville area, this is a major liability trap:
- You might be exempt as a sole proprietor with no employees
- But bringing an uninsured sub onto a job site makes their workers your responsibility
- GCs on commercial projects in downtown Greenville, Verdae, and along the I-85 corridor require every sub to produce a COI before stepping on site
What Happens If You Do Not Have Workers Comp?
SC penalties are more aggressive than most business owners realize.
| Penalty | What Happens |
|---|---|
| Daily fines | $1 per employee per day (minimum $10/day, maximum $100/day) until coverage is obtained. Commission can double the assessed amount. |
| Other consequences | Failure to maintain required coverage can lead to penalties and other consequences. |
| Asset liens | The Uninsured Employers Fund pays the claim, then places a lien on all business assets. Functions like a tax lien. Survives bankruptcy. |
A single serious workplace injury, a back injury, a fall from a ladder, a machinery accident, can generate medical bills and wage replacement costs that would bankrupt most small businesses.
What Does Workers Comp Insurance Cover?
Here is a quick overview. For the full breakdown including exclusions and the claims process, see our complete workers comp coverage guide.
Workers comp is a no-fault system. It covers your employees’ work-related injuries regardless of who was at fault. In exchange, employees give up their right to sue you (the exclusive remedy doctrine).
Medical Expenses
Full coverage for doctor visits, surgery, hospital stays, prescriptions, physical therapy, and medical equipment.
Lost Wages
Two-thirds of average weekly wage while unable to work, subject to eligibility and the applicable maximum. For injuries occurring in 2026, the maximum weekly compensation rate is $1,189.94. Check current Commission rates.
Disability Benefits
Temporary total, temporary partial, permanent partial, and permanent total disability payments based on severity.
Death Benefits
Two-thirds of wages paid to dependents for up to 500 weeks, plus up to $12,000 in burial expenses.
How Much Does Workers Comp Cost for Small Businesses in SC?
South Carolina small businesses pay around $76 per month on average, or roughly $909 per year, according to Insureon and other insurance marketplace data. Your actual cost depends on industry, payroll, and claims history.
The premium formula:
Premium = (Payroll / $100) x NCCI Class Code Rate x EMR
Two examples for a 4-person Greenville business with $120,000 total payroll:
| Business Type | Rate / $100 | Annual Cost |
|---|---|---|
| Office / Clerical | $0.18 | $216 |
| Landscaping Crew | $2.54 | $3,048 |
SC allows carriers to apply schedule credits and debits of up to 25% on base rates, so quotes can vary significantly across carriers. Read our full guide on workers comp insurance costs in South Carolina for a breakdown by industry.
How to Get Workers Comp Insurance in SC
| Option | Best For | How It Works |
|---|---|---|
| Independent agent | Most small businesses | Agent shops multiple carriers, compares quotes, finds the best rate for your class code. |
| NCCI assigned risk pool | Declined by voluntary market | Coverage is guaranteed. Premiums are higher. Agent submits the application to NCCI on your behalf. |
| Self-insurance | Large employers only | Requires WCC approval and financial ability to pay claims directly. Not practical for most small businesses. |
The SC State Accident Fund covers state and local government entities only. It is not available to private businesses.
Why an Independent Agent Saves You Money
National insurance websites give you one quote. A captive agent gives you one carrier. An independent agent gives you quotes from multiple carriers and shows you the best option.
The 25% schedule credit/debit range in SC means your premium can vary by 50% or more between carriers for the same coverage. An independent agent in Greenville like The Morgano Agency also helps with:
- Correct employee classification to avoid overpaying
- Annual premium audit preparation
- Subcontractor COI tracking
- Claims management when injuries happen
Call 864-609-5285 or request a quote online to see how much workers comp costs for your small business.
Frequently Asked Questions
Find Out If Your Small Business Needs Workers Comp
The Morgano Agency helps Greenville small businesses understand their SC workers comp requirements and find the best rates.
The Morgano Agency Inc
206B Pine Knoll Dr, Greenville, SC 29609
Phone: (864) 609-5285 | Fax: (864) 609-5689
Email: vic@morganoagency.com
Monday – Friday, 9:00 AM – 5:00 PM
