Pennsylvania business insurance requirements

Pennsylvania requires workers' compensation from the first employee, and it is one of the few states that does not use NCCI: the Pennsylvania Compensation Rating Bureau sets loss costs and experience mods. The State Workers' Insurance Fund competes with private carriers and guarantees a market for any employer. There is no state disability or paid leave program, auto minimums are a low 15/30/5 with a mandatory $5,000 medical benefit, and the Fair Share Act limits joint liability.

Workers' compensation requirements

Every employer liable under the Workers' Compensation Act must insure with SWIF or an authorized carrier, or be exempted by the department as a self-insurer (Workers' Compensation Act, Act 338 of 1915, section 305, 77 P.S. 501). There is no minimum headcount, and part-time workers count. The Act does not apply to people in domestic service, unless the employer elects in, or to commission-only real estate and insurance agents who qualify as independent contractors (section 321). Farm employers must cover workers once they pay one farm employee $1,200 or more in a year or employ one for 30 or more days (section 302(c)).

Owners are handled entity by entity. Sole proprietors, partners and LLC members are not employees, but insurers, including SWIF, may sell them voluntary coverage (section 451). An executive officer of a for-profit corporation is an employee unless they elect out, and only officers with an ownership interest can: any interest in an S corporation, or at least 5% of a C corporation (section 104). Employees who belong to a recognized religious sect opposed to insurance can be excepted on the employer's application with the employee's signed waiver (section 304.2). See can owners and officers exclude themselves from workers' comp?.

Contractors carry their subs' exposure. A contractor that subcontracts work, including work that is a regular or recurrent part of its business, is liable for comp to the sub's employees unless the sub has secured coverage, and can recover what it pays from the sub. A contractor may not subcontract "unless the subcontractor has presented proof of insurance," and a municipality must see proof of coverage or an affidavit that the contractor has no employees before issuing a building permit (section 302). Collect a certificate of insurance before the sub mobilizes; see managing subcontractor insurance and certificates.

Failing to insure is a crime. Each failure is a misdemeanor of the third degree, rising to a felony of the third degree if the court finds it intentional, and every day is a separate offense; the court can also order restitution to an injured worker. The injured employee of an uninsured employer can choose between a comp claim and a suit for damages (section 305(b), (d)). The Act also sets up an Uninsured Employers Guaranty Fund (Article XVI) for workers whose employers had no coverage.

SWIF was established in 1915 and "provides an assured source of workers' compensation insurance" for Pennsylvania employers, operating as an enterprise fund within the Department of Labor and Industry (SWIF). The PCRB, which also serves Delaware, publishes loss costs, classifications and experience modifications under its own rating plan, so NCCI class codes and mod worksheets do not carry over. The Insurance Commissioner approved the PCRB's April 1, 2026 loss cost filing (C-387) on January 21, 2026, an overall average change of -1.22% in collectible loss costs, with the employer assessment factor cut from 0.0222 to 0.0218 (PCRB Circular 1840). See workers' comp class codes and why they matter, experience modification rate and workers' compensation insurance: how it works.

Disability and paid leave mandates

Pennsylvania has no state temporary disability insurance program and no paid family and medical leave program. Employers that want to replace income during an illness or leave buy group short-term disability voluntarily. Multistate employers with workers in New Jersey, New York, Maryland or Delaware should check state disability and paid family leave programs: every mandate in 2026, since those neighbors run their own programs.

Commercial auto requirements

Pennsylvania's financial responsibility minimum is $15,000 per person and $30,000 per accident for bodily injury and $5,000 for property damage (75 Pa.C.S. 1702). Every liability policy on a vehicle registered and operated in the state must also include a $5,000 first-party medical benefit (75 Pa.C.S. 1711). Those limits are low, and nowhere near what customer contracts require. Interstate for-hire carriers need at least $750,000. See commercial auto insurance: what it covers and what it leaves out and FMCSA insurance requirements and filings for motor carriers.

The business insurance market in Pennsylvania

Flooding from remnant tropical systems and severe storms drives most catastrophe losses; FEMA's most recent major disaster declaration for the state covered Tropical Storm Debby on August 9 and 10, 2024 (DR-4815). Standard commercial property forms exclude flood, and NFIP commercial policies top out at $500,000 for the building and $500,000 for contents, with the program authorized only through December 11, 2026 (FEMA). See Commercial flood insurance: NFIP limits and private options.

The Pennsylvania FAIR Plan, formally the Insurance Placement Facility of Pennsylvania, has operated since October 28, 1968 to make basic property insurance available on insurable property in the state; it is an association of the property insurers doing business there and receives no public funds (Pennsylvania FAIR Plan). See FAIR Plans and residual markets for commercial property. Surplus lines placements for Pennsylvania home-state insureds carry a 3% tax on gross premiums less return premiums, plus a stamping fee set by the surplus lines advisory organization with department approval (Insurance Company Law sections 1611 and 1621). Unlike most states, the Pennsylvania Surplus Lines Association charges a flat fee per filing rather than a percentage: $20 when the filing reaches it within 45 days of the effective date and $45 after that (PSLA); see surplus lines taxes, stamping fees and diligent search.

Liability law that affects premiums

A plaintiff recovers as long as their negligence is "not greater than the causal negligence of the defendant or defendants," with damages reduced by their share (42 Pa.C.S. 7102). The 2011 Fair Share Act amendments to the same section make each defendant's liability several only, in proportion to its share, except for intentional torts, intentional misrepresentation, certain hazardous substance releases and any defendant found 60% or more at fault, who stays jointly and severally liable. That matters to a contractor or property owner sued alongside a more culpable party.

Personal injury and personal property damage suits must be filed within two years (42 Pa.C.S. 5524); contract claims within four (42 Pa.C.S. 5525). Large verdicts push umbrella and trucking pricing; see nuclear verdicts and social inflation: why liability costs keep rising.

Insurers based in Pennsylvania

• Erie Insurance has its home office in Erie and wrote $3.96 billion of commercial lines in 2025 by NAIC data, through independent agents.
• Donegal Insurance Group is headquartered in Marietta and wrote $649.1 million of commercial premium in 2025.
• Philadelphia Insurance Companies, Tokio Marine's niche commercial carrier, is based in Bala Cynwyd.
• Berkshire Hathaway GUARD Insurance Companies, Berkshire Hathaway GUARD Insurance Companies, is based in Wilkes-Barre and focuses on small businesses.

Where to get help

• Pennsylvania Insurance Department (pa.gov/agencies/insurance): 877-881-6388. File a complaint, ask a question or get help through its consumer help center.
• Bureau of Workers' Compensation (pa.gov workers' compensation): helpline 800-482-2383 toll free in Pennsylvania, or 717-772-4447. It verifies coverage, handles religious exemption applications and runs the WCAIS claims system.
• Pennsylvania Compensation Rating Bureau (pcrb.com) for classification, loss cost and experience rating questions.

Confirm your obligations with the bureau or a licensed broker, and compare states with the workers' comp and benefits requirements by state.