Title 9. Workers' Compensation — Subtitle 4. Insurance Coverage
Statutes in effect as of October 1, 2026.
Md. Code Ann., Lab. & Empl. § 9-401 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–401LinkCopy Citation
(a)
In this subtitle the following words have the meanings indicated.
(b)
“Authorized insurer” means a stock corporation or mutual association that is authorized under the Insurance Article to provide workers’ compensation insurance in the State.
(c)
“Governmental self-insurance group” means a group of governmental employers that self-insures in accordance with § 9-404 of this subtitle.
Md. Code Ann., Lab. & Empl. § 9-402 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–402LinkCopy Citation
(a)
Subject to subsections (b) through (f) of this section, each employer shall secure compensation for all covered employees of the employer by:
(1)
maintaining insurance with an authorized insurer;
(2)
participating in a governmental self–insurance group that meets the requirements of § 9–404 of this subtitle;
(3)
participating in a self–insurance group of private employers that meets the requirements of Title 25, Subtitle 3 of the Insurance Article;
(4)
maintaining self–insurance for an individual employer in accordance with § 9–405 of this subtitle; or
(5)
having a county board of education or private noncollegiate institution secure compensation under § 8–402(c) or § 7–114(d) of the Education Article.
(b)
The State shall secure compensation for jurors by maintaining insurance with the Chesapeake Employers’ Insurance Company and paying to the Company the premiums set by the Board for the Company as necessary to provide compensation for jurors.
(c)
The Adjutant General shall secure compensation for officers and enlisted members of the organized militia of the State by maintaining insurance with the Chesapeake Employers’ Insurance Company or an authorized insurer.
(d)
A licensed owner or trainer of a racehorse who is considered an employer under § 9–212 of this title is in compliance with the requirements of this subtitle if the owner or trainer is in compliance with the requirements of § 11–906 of the Business Regulation Article.
(e)
The Secretary of Human Services shall secure compensation for a recipient of public assistance who is a covered employee under § 9–224 of this title by maintaining insurance with the Chesapeake Employers’ Insurance Company and paying to the Company the premiums set by the Board for the Company as necessary to provide compensation for those individuals.
(f)
Anne Arundel, Kent, and Prince George’s counties shall secure compensation for members of a volunteer fire company or volunteer rescue squad by maintaining insurance with the Chesapeake Employers’ Insurance Company or an authorized insurer.
Md. Code Ann., Lab. & Empl. § 9-402.1 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–402.1LinkCopy Citation
(a)
In this section, “knowingly” means having actual knowledge, deliberate ignorance, or reckless disregard for the truth.
(b)
An employer may not fail to properly classify an individual as an employee.
(c)
If the Commission determines that an employer failed to properly classify an individual as an employee, the Commission shall order the employer to secure compensation for the covered employee in accordance with § 9–407 of this subtitle.
(d)
If the Commission determines that an employer knowingly failed to properly classify an individual as an employee, the Commission shall, in conformance with § 9–310 of this title, assess a civil penalty of not more than $5,000.
(e)
(1)
A person may not knowingly advise an employer to take action for the purpose of violating this section.
(2)
A person found in violation of this subsection shall be subject to a civil penalty of not more than $20,000.
(f)
An employer found to have knowingly violated this section who has also been found previously to have knowingly violated this section by a final order of a court or administrative unit may be assessed double the administrative penalties set forth in subsection (d) of this section for the new violation.
(g)
(1)
An employer may be assessed civil penalties by only one order of a court or administrative unit for the same actions constituting a knowing failure to properly classify an individual as an employee.
(2)
Notwithstanding paragraph (1) of this subsection, an employer may be ordered to make restitution, pay any interest due, and otherwise comply with all applicable laws and regulations by orders of a court, the Commission, and all other relevant administrative units, including the Comptroller, the Office of Unemployment Insurance, the Insurance Administration, and the Division of Labor and Industry.
(h)
If the Commission determines that an employer has failed to properly classify an individual as an employee, the Commission shall promptly notify the Office of Unemployment Insurance, the Division of Labor and Industry, the insurer, if any, the Insurance Administration, and the Comptroller.
(i)
As authorized by State and federal law, units within the Maryland Department of Labor and the Department of Budget and Management, the Secretary of State, the Comptroller, the Insurance Administration, and other State agencies shall cooperate and share information concerning any suspected violation of this title.
(j)
The Commission may adopt regulations to carry out this section.
Md. Code Ann., Lab. & Empl. § 9-403 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–403LinkCopy Citation
(a)
An employer who wishes to self–insure under § 9–402(a)(4) of this subtitle and a governmental self–insurance group that wishes to establish joint self–insurance coverage under § 9–402(a)(2) of this subtitle shall get the approval of the Commission for the self–insurance plan of the employer or governmental self–insurance group.
(b)
To get the approval of the Commission for a self–insurance plan, an employer or a governmental self–insurance group shall apply to the Commission.
(c)
The Commission may approve or deny the use of a self–insurance plan by an employer or a governmental self–insurance group.
(d)
If the Commission denies the use of a self–insurance plan by an employer or governmental self–insurance group, the employer or governmental self–insurance group may apply to the Commission for approval to use another self–insurance plan.
(e)
The Commission may revoke or modify its approval for use of a self–insurance plan if the Commission determines that revoking or modifying approval is reasonably necessary:
(1)
to secure compensation; or
(2)
except for a public service corporation under the jurisdiction of the Public Service Commission, to prevent or otherwise to reduce accidents.
Md. Code Ann., Lab. & Empl. § 9-404 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–404LinkCopy Citation
(a)
(1)
The Commission shall adopt regulations:
(i)
setting procedures and other requirements for a governmental self–insurance group to establish joint self–insurance coverage; and
(ii)
establishing guidelines to govern the investment of surplus money not needed to meet current obligations in a manner that will ensure solvency of the Fund and timely payment of claims.
(2)
Notwithstanding the local government guidelines set forth in §§ 17–101 and 17–102 of the Local Government Article, the guidelines required by paragraph (1)(ii) of this subsection shall:
(i)
state the types of investment in which money may be invested;
(ii)
include guidance for the prudent investment of money based on claim experience, cash flow projections, income, liquidity, investment ratings, and risk;
(iii)
authorize investments of money in equities, provided that investments do not exceed 30 percent of the surplus money;
(iv)
provide that money not invested in equities shall be invested in accordance with §§ 17–101 and 17–102 of the Local Government Article; and
(v)
prohibit borrowing of funds for the express purpose of investing those funds.
(b)
(1)
Subject to paragraph (2) of this subsection, a governmental self–insurance group may be formed by any combination of:
(i)
counties;
(ii)
municipal corporations;
(iii)
boards of education; and
(iv)
community colleges.
(2)
A board of education or a community college may not participate in a governmental self–insurance group unless its participation is approved by its county governing body.
(c)
Subject to the approval of the Commission, a county that participates in a governmental self–insurance group may include in the coverage:
(1)
any unit created or funded by the county; and
(2)
regardless of funding:
(i)
the board of education of the county;
(ii)
a community college in the county;
(iii)
a regional community college in the county;
(iv)
a housing agency of the county created under Division II of the Housing and Community Development Article;
(v)
a municipal corporation in the county;
(vi)
a multicounty unit that operates in the county; or
(vii)
a revenue authority in the county created by the State.
(d)
(1)
A governmental self–insurance group shall get a certificate of authority from the Commission before the governmental self–insurance group may self–insure.
(2)
To qualify for a certificate under this subsection, a governmental self–insurance group shall satisfy the Commission that the governmental self–insurance group:
(i)
is financially able to pay compensation;
(ii)
will have annual gross premiums of at least $250,000; and
(iii)
meets each other requirement under this section, § 9–403 of this subtitle, or a regulation of the Commission.
(3)
The Commission shall issue a certificate of authority to each governmental self–insurance group that meets the requirements of paragraph (2) of this subsection.
(e)
(1)
At any time, the Commission may require a governmental self–insurance group to secure payment of compensation by depositing with the Commission security:
(i)
in a form accepted by a circuit court for investment of trust money; and
(ii)
in the amount set by the Commission.
(2)
On application and subject to paragraph (3) of this subsection, the Commission shall return security that a governmental self–insurance group has deposited under this subsection if:
(i)
the members of the governmental self–insurance group cease to be subject to this title or secure compensation through an authorized insurer; and
(ii)
the governmental self–insurance group has not been liable on a claim for compensation during the 5 years immediately after the day on which the event described in item (i) of this paragraph occurred.
(3)
After reviewing the application and before returning security to a governmental self–insurance group, the Commission may require the governmental self–insurance group to submit to the Commission an indemnity bond in an amount equal to the value of the security.
(f)
Each governmental self–insurance group to which the Commission issues a certificate of authority shall have excess insurance in the amount set by the Commission.
(g)
(1)
Each governmental self–insurance group shall have in the State an office run by a competent individual who handles all of the workers’ compensation work in the State for the governmental self–insurance group.
(2)
Each governmental self–insurance group shall establish a toll–free telephone number through which an employee or claimant, or a representative of an employee or claimant, may make direct telephone inquiries during regular business hours.
(3)
The Commission may assess a fine not exceeding $1,000 on a governmental self–insurance group that does not comply with this subsection.
(h)
The Commission shall provide for advance premium discounts that are competitive with private insurance advance premium discounts.
(i)
(1)
To be informed of the continuing financial responsibility of each governmental self–insurance group, the Commission:
(i)
shall require each governmental self–insurance group to submit a report at least once each year; and
(ii)
may examine the governmental self–insurance group under oath and make other examination of the business of the governmental self–insurance group.
(2)
Each year, the Commission shall assess each governmental self–insurance group an amount not exceeding $1,500 to be used for actuarial studies and audits.
(j)
(1)
The Commission shall revoke the approval of a governmental self–insurance group to self–insure under this section if the governmental self–insurance group:
(i)
fails to deposit securities with or submit a bond to the Commission in accordance with subsection (e) of this section;
(ii)
fails to submit satisfactory reports to the Commission in accordance with subsection (i)(1)(i) of this section; or
(iii)
otherwise fails to satisfy the Commission that it is financially able to self–insure.
(2)
Whenever the Commission revokes approval for a governmental self–insurance group to self–insure under this section, the members of the governmental self–insurance group immediately shall secure compensation through an authorized insurer.
(3)
If a member of a governmental self–insurance group fails to secure compensation as required by paragraph (2) of this subsection, the Commission shall order the member of the governmental self–insurance group to secure compensation through an authorized insurer.
(k)
If a governmental self–insurance group becomes insolvent, the Uninsured Employers’ Fund shall pay the outstanding obligations of the governmental self–insurance group for compensation.
Md. Code Ann., Lab. & Empl. § 9-405 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–405LinkCopy Citation
(a)
Each employer who wants to self–insure under this section shall satisfy the Commission that the employer is financially able to pay compensation.
(b)
(1)
At any time, the Commission may require an employer who self–insures under this section to secure payment of compensation by depositing with the Commission:
(i)
security:
(1)
in a form accepted by a circuit court for investment of trust money; and
(2)
in the amount set by the Commission; or
(ii)
letters of credit:
(1)
issued by a financial institution acceptable to the Commission;
(2)
in a form acceptable to and in the amount set by the Commission; and
(3)
that meet the requirements of § 9–408(c) of this subtitle.
(2)
On application and subject to paragraph (3) of this subsection, the Commission shall return security that an employer has deposited under this subsection if the employer:
(i)
ceases to be subject to this title or secures compensation through an authorized insurer; and
(ii)
has not been liable on a claim for compensation during the 5 years immediately after the day on which the event described in item (i) of this paragraph occurred.
(3)
After reviewing the application and before returning security to an employer the Commission may require the employer to submit to the Commission an indemnity bond in an amount equal to the value of the security.
(c)
The Commission may require an employer who self–insures under this section to maintain and submit to the Commission a policy of excess insurance that is in the amount and contains the provisions that the Commission considers necessary to provide security for the payment of compensation and medical treatment.
(d)
(1)
Each employer that self–insures under this section shall have in the State competent individuals who:
(i)
handle and adjust each disputed workers’ compensation claim in the State for the employer; and
(ii)
possess the knowledge and experience to handle and adjust each disputed claim.
(2)
Each employer that self–insures under this section shall establish a toll–free telephone number through which an employee or claimant, or a representative of an employee or claimant, may make direct telephone inquiries during regular business hours.
(3)
The Commission may assess a fine not exceeding $1,000 on a self–insurer that does not comply with this subsection.
(e)
(1)
To be informed of the continuing financial responsibility of each employer who self–insures under this section, the Commission:
(i)
shall require each employer to submit a report at least once each year; and
(ii)
may examine the employer under oath and make other examination of the business of the employer.
(2)
Each year, the Commission shall assess each self–insured employer an amount not exceeding $1,500 to be used for actuarial studies and audits.
(f)
(1)
The Commission shall revoke the approval of an employer to self–insure under this section if the employer:
(i)
fails to deposit securities or letters of credit with or submit a bond to the Commission in accordance with subsection (b) of this section;
(ii)
fails to submit satisfactory reports to the Commission in accordance with subsection (e)(1)(i) of this section; or
(iii)
otherwise fails to satisfy the Commission that it is financially able to secure compensation.
(2)
(i)
On notice to the Commission pursuant to § 9–408(c)(2) of this subtitle that a letter of credit will not be renewed, the Commission shall demand that, within 30 days, the employer provide:
(1)
other satisfactory proof of the employer’s financial ability to pay; or
(2)
another letter of credit in the same amount from another qualifying financial institution.
(ii)
If the employer fails to furnish other satisfactory proof of the financial ability to pay or another acceptable letter of credit within 30 days after receipt of a demand under subparagraph (i) of this paragraph, the Commission shall demand payment from the financial institution of, and the financial institution shall pay, the amount represented by the letter of credit.
(iii)
The Commission shall hold as security under this section the amount demanded and received under subparagraph (ii) of this paragraph until the employer can provide:
(1)
satisfactory proof of the employer’s financial ability to pay; or
(2)
another acceptable letter of credit.
(iv)
On provision of satisfactory proof of financial ability to pay or an acceptable letter of credit, the Commission shall return the amount of the letter of credit to the employer or the financial institution, whichever has the equitable right to that amount at the time that the proof or letter of credit is provided.
(3)
Whenever the Commission revokes approval for an employer to self–insure under this section, the employer immediately shall secure compensation through an authorized insurer.
(4)
If an employer fails to secure compensation as required by paragraph (3) of this subsection, the Commission shall order the employer to secure compensation through an authorized insurer.
(g)
If an employer who self–insures under this section becomes insolvent, the Uninsured Employers’ Fund shall pay the outstanding obligations of the employer for compensation.
Md. Code Ann., Lab. & Empl. § 9-406 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–406LinkCopy Citation
In exercising the discretion granted to the Commission by this subtitle, the Commission shall consider:
(1)
each condition or fact about security and prompt payment of compensation, including:
(i)
the financial strength of the employer;
(ii)
the number of covered employees of the employer;
(iii)
the degree of hazard for covered employees of the employer;
(iv)
the likelihood that several covered employees will be injured or killed in the same accident; and
(v)
if the employer wants to use an authorized insurer, the reputation of the authorized insurer for fair and prompt settlement of claims for compensation; and
(2)
except for a public service corporation under the jurisdiction of the Public Service Commission, each condition or fact about prevention of accidents, including the relative effect of each method authorized under this subtitle on the employer and covered employees of the employer.
Md. Code Ann., Lab. & Empl. § 9-407 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–407LinkCopy Citation
(a)
If an employer fails to secure compensation for all covered employees of the employer as required by § 9–402 of this subtitle, the Commission shall:
(1)
issue an order directing the employer to attend a hearing to show cause as to why the employer should not be:
(i)
required to secure compensation for all covered employees of the employer;
(ii)
found in violation of § 9–402 of this subtitle; and
(iii)
assessed a penalty for noncompliance with § 9–402 of this subtitle; and
(2)
set the hearing as soon as practicable.
(b)
If, following the hearing, the Commission finds that the employer failed to secure compensation for all covered employees of the employer as required by § 9–402 of this subtitle, the Commission shall:
(1)
order the employer to:
(i)
secure and maintain insurance for all covered employees of the employer through an authorized insurer; and
(ii)
submit proof of insurance coverage to the Commission; and
(2)
order the employer to pay a penalty not to exceed $25,000 to the Uninsured Employers’ Fund.
(c)
(1)
If an employer fails to comply with an order to insure with an authorized insurer issued under subsection (b) of this section or under § 9–404(j) or § 9–405(f) of this subtitle, within 30 days after the Commission issues the order, the Commission shall set a hearing as soon as practicable.
(2)
If, following the hearing, the Commission finds that the employer failed to comply with an order issued under subsection (b)(1) of this section, the Commission may order the employer to pay a penalty not to exceed $25,000 to the Uninsured Employers’ Fund.
(d)
(1)
An employer’s failure to pay a penalty under this section constitutes a default in payment of compensation and judgment shall be entered as in a case of default in payment of compensation.
(2)
(i)
A penalty that is payable under this section is a lien against the assets of the employer that is liable for the penalty.
(ii)
A lien under subparagraph (i) of this paragraph is subordinate to claims for unpaid wages and prior recorded liens.
(3)
The Uninsured Employers’ Fund may bring a civil action to collect any penalty ordered under this section or any assessment ordered under Subtitle 10 of this title.
(4)
(i)
Notwithstanding any other provision of law, if the uninsured employer is a corporation the assets of which are not sufficient to satisfy any penalty ordered under this section, any officer of the corporation who has responsibility for the general management of the corporation in the State is jointly and severally liable for the penalty if the corporate officer knowingly failed to secure compensation for the covered employees of the employer.
(ii)
Notwithstanding any other provision of law, if the uninsured employer is a limited liability company the assets of which are not sufficient to satisfy any penalty ordered under this section, any member of the limited liability company who has responsibility for the general management of the limited liability company in the State is jointly and severally liable for the penalty if a member of the limited liability company who has general management responsibility knowingly failed to secure compensation for the covered employees of the employer.
Md. Code Ann., Lab. & Empl. § 9-408 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–408LinkCopy Citation
(a)
Any agreement of an employer that indemnifies the employer for damage or loss due to the injury of an employee caused by accidental personal injury, occupational disease, or negligence of the employer or an agent, officer, or servant of the employer is void unless the agreement also covers the liability of the employer to pay compensation under this title.
(b)
An agreement by a covered employee to pay to or for an employer any part of a premium for coverage under this title is void.
(c)
A letter of credit issued under this subtitle shall contain:
(1)
a provision that the letter of credit is irrevocable for the term specified;
(2)
a provision that the letter of credit renews automatically at the end of the term unless written notice of nonrenewal is sent by the financial institution to the Commission by registered mail at least 60 days before the date of expiration;
(3)
a statement that the letter of credit is not subject to any condition or qualification; and
(4)
a statement that the letter of credit is governed by the Uniform Customs and Practice for Documentary Credits of the International Chamber of Commerce.
Md. Code Ann., Lab. & Empl. § 9-409 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–409LinkCopy Citation
An employer may appeal any decision of the Commission under this subtitle to the circuit court for the county in which the employer resides.
Md. Code Ann., Lab. & Empl. § 9-410 (2026)
Title 9. Workers' Compensation
Subtitle 4. Insurance Coverage
§ 9–410LinkCopy Citation
(a)
An insurer that provides workers’ compensation insurance in the State shall have in the State competent individuals who:
(1)
handle and adjust each disputed workers’ compensation claim in the State for the insurer; and
(2)
possess the knowledge and experience to handle and adjust each disputed claim.
(b)
An insurer that provides workers’ compensation insurance in the State shall establish a toll-free telephone number through which an insured or claimant, or a representative of an insured or claimant, may make direct telephone inquiries during regular business hours.
(c)
The Commission may assess a fine not exceeding $1,000 on an insurer that does not comply with this section.