Virginia business insurance requirements

Virginia requires workers' compensation once a business regularly has more than two employees, and the count includes the employees of any subcontractor it hires to do its work. That rule catches small contractors who assume they are exempt. There is no state fund and no exemption form. Two other features shape business insurance here: Virginia is one of the few states that still bars recovery for a plaintiff who was even slightly negligent, and it passed a paid family and medical leave law in 2026 that starts collecting contributions in 2028.

Workers' compensation requirements

The Act excludes employers with "less than three employees" regularly in service in the same business in Virginia (Va. Code 65.2-101). The Workers' Compensation Commission states the rule from the other direction: an employer that "regularly employs more than two part-time or full-time employees" must carry coverage, and for those employers "there are no waivers and no exceptions" (VWC). Part-time, seasonal and temporary workers, working family members, corporate officers and LLC managers all count, even officers who draw no regular salary. Underground coal mine operators are covered regardless of size.

The subcontractor rule is the trap. A business or contractor that hires subs to perform its trade or fulfill a contract must add the subs' employees to its own, and if the total is more than two, it needs coverage, even if every sub is insured. The Commission also warns that a carrier can charge premium for an uninsured sub, even a sole proprietor with no employees, so keep a certificate of insurance for every sub at audit. Behind that sits the statutory employer rule: an owner or contractor is liable for comp to an uninsured sub's workers as if it had hired them directly, all the way down the chain (65.2-302).

Virginia offers no exemption or waiver form for sole proprietors. A sole proprietor with no employees who hires no subs does not need coverage, and sole proprietors, partners and single-member LLC members are covered only if they elect it (VWC FAQs). Executive officers and LLC managers are employees by definition, but they can reject coverage if the business has a policy: the officer files a Rejection of Coverage (Form 16A) with the Commission for approval and gives the insurer a copy. See can owners and officers exclude themselves from workers' comp? and independent contractors and workers' comp: the misclassification risk.

An employer that fails to insure faces a civil penalty of up to $250 for each day without coverage, up to $50,000 plus costs, and owes the injured worker's benefits itself (65.2-805). The Commission says continued failure can lead to an order barring the business from operating and to criminal prosecution. Out-of-state employers need Virginia listed in item 3A of their policy; a 3C listing is not enough, and monopolistic state fund policies cannot cover Virginia work (employees in several states: other-states coverage and multistate workers' comp).

There is no state fund, and the Commission does not sell coverage. Employers buy from licensed carriers, qualify to self-insure, join a licensed group self-insurance association or use a registered PEO. An employer turned down in the voluntary market goes to NCCI, which manages Virginia's assigned risk market; the Bureau of Insurance sets rates each year (VWC FAQs). See workers' compensation insurance: how it works and assigned risk and residual markets for workers' comp.

Disability and paid leave mandates

Virginia has no state disability insurance mandate, but it now has a paid family and medical leave law, signed April 22, 2026. The Virginia Employment Commission will set the first contribution rate by October 1, 2027; payroll contributions begin April 1, 2028; and benefits start December 1, 2028. Workers will get up to 12 weeks a year at up to 80% of their average weekly wage, capped at the state average weekly wage. Contributions are shared by employers and workers, employers with 10 or fewer employees pay no employer share, and employers can apply to use an approved private plan that meets or exceeds the state program (VEC). Regulations are still in development, so watch for the rate and the private-plan rules before budgeting for 2028. See state disability and paid family leave programs: every mandate in 2026.

Commercial auto requirements

For policies effective on or after January 1, 2025, Virginia's minimums rose to $50,000 per person and $100,000 per accident for bodily injury and $25,000 for property damage (Va. Code 46.2-472). Interstate for-hire carriers of general freight need at least $750,000 under federal rules. See commercial auto insurance: what it covers and what it leaves out, hired and non-owned auto and FMCSA insurance requirements and filings for motor carriers.

The business insurance market in Virginia

Flooding and storms drive losses from the Chesapeake to the mountains. FEMA declared major disasters for flooding and landslides in southwest Virginia from August 30, 2021 (DR-4628) and July 13, 2022 (DR-4674), Tropical Storm Helene from September 25, 2024 (DR-4831), and winter storms and flooding from February 10, 2025 (DR-4863). Standard property forms exclude flood, and NFIP commercial policies top out at $500,000 building and $500,000 contents (FloodSmart); see Commercial flood insurance: NFIP limits and private options.

The Virginia Property Insurance Association is the residual market facility that makes basic property insurance available for qualified property the voluntary market will not write (Va. Code 38.2-2700); see FAIR Plans and residual markets for commercial property. Surplus lines brokers pay a 2.25% premium license tax on business for Virginia home-state insureds, file quarterly reports on Form 801 within 30 days after each quarter and an annual Form 802 by March 1; there is no stamping fee (Virginia Tax; 38.2-4809). See surplus lines taxes, stamping fees and diligent search.

Liability law that affects premiums

Virginia keeps pure contributory negligence. If the defendant proves the plaintiff was negligent and that negligence was a proximate cause of the accident, the plaintiff recovers nothing (Supreme Court of Virginia, 2014 order). The legislature carved out railroad employees, whose damages are reduced instead (8.01-58). For premises and auto defendants it is one of the most favorable rules in the country, which is one reason liability claims settle differently here than in neighboring states.

Personal injury suits must be filed within two years and injury to property within five (8.01-243). Written contracts signed by the party to be charged carry a five-year period; oral and unsigned contracts three (8.01-246).

Insurers based in Virginia

• Markel, headquartered in Glen Allen, is a specialty insurer writing E&S, professional liability, programs and surety ($7.73 billion of commercial premium in 2025 by NAIC data).
• Kinsale Insurance, based in Richmond, writes only excess and surplus lines for hard-to-place small and midsize risks ($1.93 billion).

Where to get help

• State Corporation Commission, Bureau of Insurance (scc.virginia.gov): 804-371-9631 or toll free 800-552-7945. File complaints about insurers and agents with the Bureau; it also answers questions on comp rates, classifications and audits (804-371-9185).
• Virginia Workers' Compensation Commission (workcomp.virginia.gov): Customer Contact Center 877-664-2566; Insurance Department 804-205-3586 for coverage requirements and Form 16A filings.
• Virginia Employment Commission (vec.virginia.gov/pfml) for paid family and medical leave updates.

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