Workers Compensation Requirements and Penalties

IC-22-3-2-2 requires employers to carry workers compensation coverage, with some exceptions

All Indiana employers must provide Workers Compensation coverage to all employees subject to Indiana Code 22-3-2-2. IC 22-3-2-2 Mandatory compliance; burden of proof; exemptions     Sec. 2. (a) Every employer and every employee, except as stated in IC 22-3-2 through IC 22-3-6, shall comply with the provisions of IC 22-3-2 through IC 22-3-6 respectively to pay and accept compensation for personal injury or death by accident arising out of and in the course of the employment, and shall be bound thereby.

Some Exceptions to this code include:

  • ​Railroad Employees engaged in train service
  • Farm Laborers
  • Employees of Indiana municipal corporations who are members of the fire department or police department and a firefighters’ pension fund or police officers’ pension fund.​
  • ​Independent Contractors as defined by the guidelines of the Internal Revenue Service.

For the full text of the code, including further exemptions, please go to this link: Indiana Cod​​e 22​

Penalties for No Insurance


An employer who fails to carry insurance or self-insure its workers compensation liability commits a Class A infraction (IC 22-3-4-13 and IC 22-3-5-1). The WC Board could order:

  • Fine up to $10,000
  • Compensation not to exceed double the compensation provided by this Act;
  • Medical expenses, and
  • Reasonable attorney fees
  • Employer to cease business in Indiana until proof of insurance shown

The Board has an administrative procedure to refer an employer to a county prosecutor, who does have authority over the lack of coverage matter. Then, it is up to the prosecutor to investigate and enforce the law. Such enforcement could vary widely from county to county.

Report an injury

A person who fails to report an injury commits a Class C infraction (IC 22-3-4-13). An employer is required by law to report all injuries to its insurance company and any injury resulting in at least one day of missed work to the Board. Failure to report the injury can result in fines and could also result in a bad faith judgment against the employer, which could lead to a fine of up to $20,000.

Below are excerpts from the relevant statute sections.

22-3-4-13(d) “A person who violates any provision of this article, except IC 22-3-5-1 or IC 22-3-7-34(a) or IC 22-3-7-34(b), commits a Class C infraction. A person who violates IC 22-3-5-1 or IC 22-3-7-34(a) or IC 22-3-7-34(b) commits a Class A infraction. The worker’s compensation board in the name of the state may seek relief from any court of competent jurisdiction to enjoin any violation of this article.”

22-3-5-1(a) “Every employer under IC 22-3-2 through IC 22-3-6, except those exempted by IC 22-3-2-5, shall: (1) Insure and keep insured the employer’s liability under IC 22-3-2 through IC 22-3-6 in some corporation, association, or organization authorized to transact the business of worker’s compensation insurance in this state; or(2) Furnish to the worker’s compensation board satisfactory proof of the employer’s financial ability to pay direct the compensation in the amount and manner and when due as provided in IC 22-3-2 through IC 22-3-6.”

Insurance Companies

27-7-2-38. Penalty for violation of chapter – Suspension for failure to pay fine. (a) A person who fails to comply with this chapter or fails to comply with any lawful order or ruling made by the department in the administration of this chapter commits a Class C infraction. If a person is fined for violating this section and fails to pay the fine within thirty (30) days after final judgment, the insurance commissioner shall suspend the license of the person to transact any form of insurance business in Indiana until the fine and costs incident to the final judgment are paid in full.
(b) The commissioner may, if the commissioner finds that any person or organization has violated this chapter, impose a penalty of not more than one thousand dollars ($1,000) for each such violation but if the commissioner finds the violation is willful the commissioner may impose a penalty of not more than ten thousand dollars ($10,000) for each such violation. These penalties are in addition to any other penalty provided by law.

The Indiana Code is available on the State of Indiana website. IC 34-28-5-4 defines maximum judgments for infractions:Class A: $10,000Class B: $ 1,000Class C: $ 500Class D: $ 25