Vermont workers' compensation insurance: Your guide to requirements and getting a policy
If you’re a Vermont employer looking to protect both your business and your team, you’re in the right place. At Beyond, we provide the essential information you need to understand how workers’ compensation works in 2026 and how to stay compliant.
In Vermont, workers’ compensation is governed primarily under Title 21, Chapter 9 of Vermont law, and most employers must secure coverage for employees through an approved insurance policy or an approved self-insurance option.
In Vermont, employers generally must secure workers’ compensation coverage for their employees.
Vermont law defines who counts as a “worker/employee” for coverage purposes and lists key exclusions. The definition of “worker/employee” excludes certain categories such as casual employment not in the employer’s trade/business, amateur sports participants (even if the employer contributes), and certain agricultural/farm workers when the employer’s aggregate payroll is under $10,000 in a calendar year (unless the employer opts in).
Vermont also allows limited owner/executive opt-outs in specific circumstances. With approval from the Commissioner, a corporation or LLC may be able to exclude up to four executive officers/managers/members from coverage requirements (subject to the conditions in the statute).
Posting requirement: once an employer has complied with the law’s requirement to secure coverage, the employer must post and maintain, in a conspicuous place at each business location, a printed notice of compliance in a form prescribed by the Commissioner.
If you need help interpreting how a specific role/classification is treated, consult the statute directly and (when appropriate) contact Vermont Department of Labor for guidance.
With a valid policy, workers’ compensation generally provides benefits for work-related injuries and occupational conditions covered under Vermont law, including medical care and wage replacement when disability prevents full work.
Medical benefits: covered employers must furnish reasonable surgical, medical, and nursing services and supplies, including prescription drugs and durable medical equipment, as provided by statute.
Wage replacement (temporary disability): Vermont provides weekly wage-replacement benefits for temporary total disability and temporary partial disability, governed by statute and related rules.
Permanent impairment: Vermont law provides permanent partial disability benefits tied to whole-person impairment determinations, as set out in statute.
Vocational rehabilitation: Vermont law provides for vocational rehabilitation services in appropriate circumstances, and also sets requirements around vocational rehabilitation providers.
Reinstatement rights: Vermont has statutory reinstatement protections that can apply in certain cases, including reinstatement when recovery occurs within two years of the onset of disability (with conditions and exceptions in the statute).
Failing to secure required coverage can result in serious enforcement actions under Vermont law.
Daily penalties: after the required process (including a hearing referenced in the statute), an employer may be assessed an administrative penalty of up to $100 per day for the first seven days without coverage and up to $150 per day thereafter.
Stop-work orders and additional penalties: Vermont law authorizes stop-work orders and additional administrative penalties once an order to obtain insurance is issued, including up to $250 per day, and potential additional penalties up to $250 per employee per day (as specified in the statute).
Violation penalties: violating a stop-work order can result in civil penalties up to $5,000 for a first violation and up to $10,000 for subsequent violations, or criminal penalties up to $10,000 and/or up to 180 days of imprisonment (as provided by statute).
Also note: Vermont law includes provisions that can create personal liability in certain business-structure situations when required coverage is not secured.
If an employee reports a workplace injury or illness, focus on three priorities: get care, document and notify, and follow required timelines.
Important reminder: reporting an injury and cooperating with the process does not necessarily mean the employer accepts liability; compensability and benefit decisions are made through the workers’ compensation system under Vermont law.
Having workers’ comp insurance is more than legal compliance, it’s about protecting your people and your business. For employees, it provides access to medical benefits, wage replacement during qualifying disability, and support such as vocational rehabilitation when appropriate.
