How Much Does Workers’ Comp Insurance Cost?

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what is workers comp insurance video

What Is Workers’ Compensation Insurance?

Workers' compensation insurance gives employees medical, wage and other financial benefits if they are injured or become ill on the job. This coverage is required in most states. Workers' compensation insurance is also known as workman's comp or workers' comp insurance.
workers’ comp insurance cost

How Much Is Workers’ Comp Insurance?

how much is workers comp insurance Most of our customers with less than $300,000 annually in payroll paid an average of $81 a month for el seguro de compensación para trabajadores, also known as workers’ comp insurance.1
It’s important to know that the cost of workers’ compensation insurance varies between businesses. Insurance companies look at different factors when determining premiums, so there’s no standard cost. Factors can include:
  • Nómina de Sueldos
  • Industria
  • Claims history
  • Tipo de trabajo
Most states require businesses to have workers’ compensation insurance if they have employees. What does workers’ comp cover? It helps employees recover from serious work-related injuries or illnesses.

How Much Do Customers of The Hartford Pay for Workers’ Comp Insurance?

Insurance companies use different factors to determine workers’ compensation insurance costs. There isn’t one set rate for small business customers. The price each business pays depends on many variables, starting with what they do. Small businesses insured by The Hartford pay an average cost of $1,028 per year or $86 a month.2,3
A formula you can use to help estimate workers’ compensation insurance premiums is:
Workers’ Class Code Rate X Claims Experience Modifier X (Payroll / $100) = Premium**
In some states, insurers may use an experience modification number or rating. This workers’ compensation insurance rating is based on your claims history. Businesses with a clean workers’ compensation claims history may have an experience modification number below 1.00. A number greater than 1.00 means the business has a history of claims.
Remember, this is a simplified formula. The best way to find out your business’ cost for workers’ comp insurance is to get a cita.

How Are Workers’ Compensation Insurance Costs Calculated?

workers compensation insurance cost Not all workers’ comp premiums are the same. Several factors that can affect workers’ comp rates incluyen:

State Requirements

Workers’ compensation laws vary by state. Most states require businesses with at least one employee to have workers’ compensation insurance, but there are exceptions. For example, in Arkansas small business owners with less than three employees don’t need coverage.
It’s a good idea to work with a business insurance specialist to make sure you understand and comply with your local laws.

The Number of Employees and Payroll

The bigger your staff, the more it’ll cost for workers’ comp coverage. That’s because your business’ payroll is part of the premium (annual cost) calculation for workers’ compensation insurance. Your cost is calculated per $100 of payroll. So, if your payroll is larger, you can expect to pay a higher premium.

Types of Work Done by Employees

Jobs with higher levels of risk result in higher workers’ comp costs. For example, an accountant faces a lower risk of injury than a lumberjack. Riskier work that has a greater potential for workplace injuries, illnesses or death can cost more for coverage.

Claims History

Your claims history can also impact your workers’ compensation cost. If you’ve submitted a large amount of workers’ compensation claims in the past, you will likely pay a higher rate. The more severe these claims are, the higher your cost will be as well.

How Do Workers’ Comp Class Codes Impact Insurance Cost?

The National Council on Compensation Insurance (NCCI) maintains workers’ comp class codes. The NCCI bases class codes on the types of jobs that workers’ do, which helps insurers calculate worker’s compensation rates. Having high-risk class code employees can result in a higher workers’ compensation cost.

Workers’ Compensation Costs by State

Is workers’ comp required? Workers’ compensation costs can vary significantly by state. That’s because insurance requirements and regulations can vary greatly, including the number of employees that will require coverage and whether contract workers and part- and full-time employees need coverage. Depending on the laws, it can impact your workers’ comp insurance cost.
Some states don’t require micro-businesses to buy workers’ comp insurance. This means you may not need coverage if you have fewer than five employees. Alabama, for instance, only requires businesses with at least five employees to have workers’ comp insurance. Most states, however, require businesses with at least one full-time employee to carry coverage.
Some states may also exempt certain employers from coverage requirements. In Nuevo México, real estate agents and ranchers don’t need coverage. Sole proprietors and business partners in Nueva York are also exempt.
Several states make workers’ comp exemptions for family members who are employees. In Dakota del Norte, children younger than 22 who work for their parents don’t need workers’ compensation insurance coverage.
Certain states also limit where businesses can get workers’ comp insurance, which can impact costs. Four monopolistic states require businesses to get coverage from a state fund. Businesses in these states cannot be insured by private insurers. The four monopolistic states are:

What Is the Average Workers’ Comp Rate?

The average workers’ comp rate that our customers paid in 2021 was $70 a month.4 But just like laws differ between states, workers’ comp rates also vary.

How To Get the Best Price on Workers’ Comp Insurance

Buying workers’ compensation insurance can feel daunting. With state regulations, there’s a lot of factors to take into consideration. And working across state lines may make the process even more complicated. That’s why it’s important to work with an insurance company that has experience with workers’ compensation insurance.
Some ways you can help lower your workers’ comp cost include:

Training Your Employees

Training employees on proper workplace procedures can help reduce the likelihood of injuries, which could help lower your workers’ compensation insurance cost.

Choosing the Right Limits and Deductible

Raising your deductible can help lower your insurance rate. Your deductible is the amount you pay out of pocket before your insurance company covers a claim.

Having Safety Standards

Putting safety measures in place at your business can help you identify and mitigate workplace hazards before they occur. This can help lower the amount of workers’ compensation claims submitted.

Bundling Your Policies

Bundling can help you save money on insurance. For example, bundling your workers’ compensation and general liability coverages could help you save on both policies.
At The Hartford, we’re backed by more than 200 years of experience. Our specialists are ready to help you get workers’ comp insurance and any other type of coverage you may need at the right price.
Obtenga una cita today and see how we can help protect your business.
Last Updated: November 20, 2023
1,2,3,4 Premium amounts presented are based on monthly premium paid by The Hartford’s Small Business customers between 1/1/22 and 9/14/23 for 12-month policies. Premium is derived from a number of factors specific to your business and may vary.
** This is a simplified calculation for educational purposes only. Actual premium calculations can be more complex. Experience mods are subject to state requirements and do not apply to every policy.
Divulgaciones adicionales a continuación.
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