Indiana Workers’ Comp Exemption
We file workers’ compensation exemptions for Indiana sole proprietors, LLC members, and corporate officers. Send us your details and we’ll confirm whether you qualify and handle the filing.
When coverage is required in Indiana
Indiana's Worker's Compensation Act (IC 22-3-2 through 22-3-6) requires employers to carry coverage or otherwise demonstrate financial ability to pay compensation directly; I did not find an official-source statement of a specific minimum employee-count threshold in the materials reviewed. Sole proprietors, partners, LLC members/managers, and independent contractors are, by default, NOT automatically covered as 'employees' of their own business (see below), but any employees they hire must be covered.
Who can be excluded in Indiana
Sole proprietors
Excluded by default as defined in IC 22-3-6-1(b)(4) (and, for construction-specific purposes, IC 22-3-7-9(b)(2)). A sole proprietor who does not carry coverage on themselves and wants formal documentation of that exempt status applies for an Independent Contractor Affidavit of Exemption using Form WCE-1 (State Form 45899) with the Worker's Compensation Board of Indiana, under IC 22-3-2-14.5. The affidavit/certificate is valid for one year from issuance and must be renewed annually. Fee: $20 total ($5 non-refundable to the Indiana Department of Revenue + $15 to the Worker's Compensation Board), confirmed directly from the official State Form 45899 PDF. A sole proprietor may instead elect TO BE covered as an employee by serving written notice on their insurance carrier; no exemption is needed in that case, and the owner isn't considered an employee until the carrier receives that notice.
Partners
Same regime as sole proprietors: excluded by default per IC 22-3-6-1(b)(5) (and IC 22-3-7-9(b)(3) for the construction-license context); may obtain the same Form WCE-1 Affidavit of Exemption ($20 fee, 1-year validity, annual renewal) or elect in via written notice to the carrier.
LLC members
Members/managers of an LLC are excluded by default per IC 22-3-6-1(b)(9); may obtain a Form WCE-1 Affidavit of Exemption on the same terms, or elect in via written notice to the carrier and the Board.
Corporate officers
Treated differently from sole proprietors/partners/LLC members — corporate officers are, by default, considered employees and are covered, but an officer of the corporation (including one who is also an owner) may elect NOT to be an employee under IC 22-3-2 through 22-3-6. That election requires written notice served on both the corporation's insurance carrier and the Worker's Compensation Board, and the officer is not excluded until the Board and carrier receive that notice. This election is a separate mechanism from Form WCE-1 (WCE-1's checkboxes cover only sole proprietor/partner/LLC member/independent-contractor status, not corporate officers) — a search reference points to a 'State Form 36097' for the corporate-officer election, but I was not able to independently verify that form number against a primary Indiana government source, so it should be confirmed with the Worker's Compensation Board before being published as a form name. No cap on the number of officers who may elect out was found in the materials reviewed.
Construction rules in Indiana
Independent-contractor status for the building/construction trades follows IRS-style common-law factors under IC 22-3-6-1(b)(7) and IC 22-3-7-9(b)(5) (referenced in the official WCE-1 form itself), which is the basis for the 'independent contractor' checkbox on Form WCE-1 — this is the same exemption-affidavit process described above, not a separate construction-only regime.
How the exemption is filed
For sole proprietors, partners, LLC members, and independent contractors: file Form WCE-1 (State Form 45899, 'Application for Worker's Compensation Clearance Certificate' / Independent Contractor Affidavit of Exemption) with the Indiana Department of Revenue (which processes and forwards it to the Worker's Compensation Board for stamping). $20 total fee ($5 non-refundable to DOR + $15 to the Board), paid by money order or certified check. The certificate/affidavit is NOT valid until stamped by the Worker's Compensation Board, and is valid for one year from issue — must reapply annually. Until the stamped certificate is received, Indiana law treats the person as required to carry coverage. For corporate officers: a separate written-notice election to the carrier and the Board (not Form WCE-1) — see corporateOfficers field above for caveats on the exact form number.
- Statute
- IC 22-3-2-14.5 (independent contractor exemption filing/certificate process); IC 22-3-6-1(b)(4),(5),(7),(9) (definitions/exemptions for sole proprietor, partner, independent contractor, LLC member); IC 22-3-7-9(b)(2),(3),(5) (parallel construction-licensing definitions); IC 22-3-7-34.5 (referenced on Form WCE-1 alongside 22-3-2-14.5)
- Market
- Competitive — coverage is bought from a private carrier.
Notes and open questions
The WCE-1 form details (fee, validity period, statute cites, categories covered) were read directly from the official State Form 45899 PDF, downloaded from secure.in.gov — high confidence on those specifics. The corporate-officer election mechanism and its associated 'State Form 36097' reference came from a web-search synthesis (citing ICRB.net and Justia's reproduction of IC 22-3-6-1), not a document I fetched and read directly — flag this piece as needing direct confirmation from the Worker's Compensation Board (e.g., a call or a direct statute pull) before publishing a specific form number for corporate officers. Do not conflate WCE-1 with a corporate-officer exemption — the form's own checkboxes only cover sole proprietor, partner, LLC member/manager, and independent contractor.
Sources
- https://secure.in.gov/wcb/files/45899-fill-in-Final.pdf
- https://www.icrb.net/references/excluded-workers/
- https://www.icrb.net/references/executive-officer/
Source material dated Form 45899 revision R8 / 3-25 (i.e., current as of March 2025 per the form's own revision stamp). Compiled from official Indiana sources as a starting point, not legal advice — rules change, and your situation may turn on facts this page cannot see. Confirm with Worker's Compensation Board of Indiana (in coordination with the Indiana Department of Revenue for Form WCE-1 processing) or ask us and we’ll check it for you.
Workers' comp exemption filing in Indiana
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