Under Virginia workers' compensation law, which type of contractor is exempt from carrying workers' compensation insurance?
Correct Answer
C) Sole proprietors with no employees
Virginia law exempts sole proprietors who have no employees from the requirement to carry workers' compensation insurance.
Why This Is the Correct Answer
Under the Virginia Workers' Compensation Act (Title 65.2), sole proprietors who have no employees are not required to carry workers' compensation insurance because the law mandates coverage for employers with employees. A sole proprietor with zero employees has no statutory obligation to insure anyone under the Act, including themselves (though they may elect coverage voluntarily).
Why the Other Options Are Wrong
Option A: Partnerships with family members only
A partnership composed only of family members is not a recognized exemption category under Virginia workers' compensation law. Partnerships with any employees — related or not — are generally required to carry coverage once the employee threshold is met.
Option B: LLCs with part-time employees only
LLCs with part-time employees are not categorically exempt. Part-time status does not eliminate the employer's obligation to provide workers' compensation coverage. The nature of the employment relationship, not the number of hours, drives coverage requirements.
Option D: Corporations with fewer than 5 employees
Virginia law does not exempt corporations based on a headcount below 5. In the construction industry specifically, Virginia requires workers' compensation coverage for employers with one or more employees, with very limited exceptions — small employee count is not one of them.
Memory Technique
If there is no one to insure, there is no insurance required. A sole proprietor alone is an island — no employees means no mandate. The moment a worker sets foot on that island, coverage is required.
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