Self‑Insurance Eligibility in D.C.
The District of Columbia does allow employers to self‑insure workers' compensation, but only if they meet the statutory financial and regulatory requirements set by the Office of Workers' Compensation (OWC). Eligible entities must demonstrate sufficient net worth, maintain a surety bond, and obtain a self‑insurance certificate from the OWC.
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Key Requirements
To qualify, a company must:
- Maintain a minimum net worth of $1 million (or a higher amount if required by the OWC based on payroll size).
- Secure a surety bond ranging from $50,000 to $500,000, depending on the employer's risk profile.
- Submit audited financial statements and a detailed safety program for OWC review.
- Agree to periodic audits and reporting of all workers' compensation claims.
Application Process
Employers submit a self‑insurance application through the OWC portal, attaching financial documents, bond information, and a safety plan. The OWC reviews the package, may request additional data, and issues a certificate if all criteria are satisfied. After certification, the employer assumes full responsibility for claim payment, medical benefits, and disability benefits.
Compliance and Oversight
Self‑insured employers are subject to ongoing oversight, including annual financial audits, quarterly claim reports, and random inspections. Failure to comply can result in revocation of the certificate and a requirement to obtain commercial workers' compensation coverage.
Comparison of Self‑Insurance vs. Commercial Coverage
| Aspect | Self‑Insurance | Commercial Policy |
|---|---|---|
| Up‑front Cost | High (bond, net‑worth requirement) | Premium paid annually |
| Risk Management | Employer assumes all risk | Insurer assumes risk |
| Regulatory Oversight | Frequent audits | Standard policy compliance |
| Flexibility | Control over claim handling | Standardized claim process |