Insurance in Ohio

Ohio trade contractors face two insurance obligations that are structured differently from most other states: a state-set liability insurance minimum tied to the OCILB license, and a monopolistic state workers' compensation fund run by the Ohio Bureau of Workers' Compensation (BWC). General liability: state minimum. To be issued an OCILB contractor license in electrical, plumbing, HVAC, hydronics, or refrigeration, the applicant must submit a Certificate of Liability Insurance showing at least $500,000 in contractor liability coverage. The insurance and the license must both be assigned to a single "contracting company" as defined in Ohio Revised Code 4740.01(C). The board's authority to require coverage is in ORC 4740.06; the current $500,000 threshold is published on the OCILB examination application. Local jurisdictions may require higher limits. Cities and counties that register OCILB-licensed specialty contractors sometimes require additional coverage on top of the state minimum. For example, some Ohio municipalities reference $300,000 specialty-contractor coverage or higher limits for public-works bidding. Always confirm the local registration rules with the building department where work will be performed. Workers' compensation: monopolistic state fund. Ohio is one of four monopolistic workers' compensation states: private workers' compensation insurance cannot be purchased from commercial carriers. Coverage must be obtained from the Ohio Bureau of Workers' Compensation under Ohio Revised Code Chapter 4123. Private employers are required to carry coverage as soon as they hire their first employee. Who must carry coverage. - Private employers with one or more employees (full-time, part-time, or seasonal) must maintain BWC coverage. - Sole proprietors, partners, and LLC members are not required to cover themselves but may elect to do so. They are required to cover any employees they hire. - Qualifying large employers may apply for self-insured status with BWC. How premiums work. BWC sets rates by job classification code, expressed as a cost per $100 of payroll. Private-employer policy year runs July 1 to June 30, with premium installments. Because premiums are based on estimated payroll, each annual policy is subject to a true-up audit. Construction classifications are rated separately, and Ohio publishes Construction Industry Cap provisions that can limit experience-modifier volatility for eligible construction employers. Penalties for non-compliance. Operating without required BWC coverage exposes the employer to premiums owed, penalties, and personal liability for medical and indemnity costs of any injury that occurs while coverage lapsed (ORC 4123). Other common coverages for Ohio trade contractors. In addition to the OCILB-required general liability and BWC workers' comp, most contractors carry commercial auto on trucks and trailers, tools and equipment (inland marine), and, if they employ licensed tradespeople working on their own license, contractor errors-and-omissions or installation-floater coverage. These are not state-mandated; requirements are driven by GCs, lenders, and job specifications.