Contractor License Practice Exam

What is the minimum number of employees an employer must have to be required to purchase Workers Compensation Insurance?

1. 5

2. 1

3. 10

4. 15

The correct answer is: 1

The correct answer is that an employer must purchase Workers Compensation Insurance if they have at least one employee. This requirement applies because Workers Compensation Insurance is designed to provide benefits to employees who suffer work-related injuries or illnesses. Even a single employee working in a business can be potentially exposed to risks, and the coverage ensures that parties are protected and can receive necessary medical benefits and lost wages if an incident occurs. The existence of just one employee highlights the employer's responsibility to provide a safe working environment and insurance coverage, reflecting the vital nature of employee well-being in any workplace, regardless of size. This foundational principle helps promote accountability and preparedness within small businesses and protects employees from the financial burdens of work-related accidents.