Most businesses with employees must have workers' compensation insurance, and exemptions are rare. If you have even one employee, you want coverage regardless of your business structure or industry. Exemptions primarily apply to business owners themselves: sole proprietors, partners, LLC members and corporate officers who can exclude themselves from coverage while still protecting their employees.
A workers' compensation exemption lets specific individuals or businesses opt out of workers' compensation insurance. Workers' compensation insurance typically covers medical expenses and lost wages for employees injured or made ill by their jobs.