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Understanding Workers' Compensation Insurance Cost

Workers’ compensation insurance is a type of insurance policy that’s required for most businesses under U.S. state laws. With workers’ compensation insurance, you’re covered if a worker is injured while on the job at your business. From small accidents to life-changing incidents, your employees will get the benefits they need to recover, and you’ll be protected against legal liability.

But how much does workers’ compensation insurance cost? And what goes into the calculation? Most small businesses will pay somewhere between a few hundred dollars to a few thousand dollars in workers’ compensation insurance premiums each year.

For example, a company with a total payroll of $100,000 might have an annual workers' compensation insurance cost ranging from $700 to $3,000.

Why the cost variation? Well, there are a lot of factors that can influence the cost of your workers’ comp insurance premiums. Things like the nature of your business, history of past accidents, and the state you operate in can all have a significant impact.

Want to learn more? You’re in the right place. In this comprehensive guide from WorkCompOne, we’ll be discussing everything that goes into the cost of workers’ compensation insurance. We’ll even give you some tips on finding the right policy and saving on workers’ comp premiums. Let’s dive in.

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What Is Workers’ Compensation Insurance?

Workers' compensation insurance, often shortened to “workers’ compensation” or “workers’ comp,” is a type of commercial insurance policy that many small businesses need to carry. The policy protects workers and provides medical care, disability benefits and death benefits for workplace injuries.

The purpose of workers’ compensation insurance is to protect both employees and employers. Employees are protected because they are able to get benefits for lost income, disability, disfigurement and other things that can result from serious injuries.

Employers are protected because workers’ compensation insurance is typically the “sole remedy” for workplace accidents. In most cases, an employee cannot sue your business if they file a workers’ compensation claim.

There are exceptions, of course, but for the most part, workers cannot sue your company after an injury if they are covered by workers’ comp.

Unlike other small business insurance policies, workers’ compensation is regulated at the state level, so rates and coverage requirements differ from state to state. One thing that’s universal, though, is that employers can be legally required to carry workers’ compensation insurance for all employees on their payroll.

Also, workers' compensation insurance expenses must be paid by the employer — they cannot be passed along to employees. You can make your employees pay their part of other types of insurance benefits like health or disability insurance, but employers must pay 100% of annual workers’ compensation premiums.

Factors Influencing Workers’ Comp Insurance Cost

So, are you wondering what factors influence workers’ compensation cost for your business? In this section of our guide, we’ll look at the four biggest factors briefly, and then dive a bit deeper into the details.

  1. What Size Is Your Business? Workers’ compensation premiums are calculated based on your total payroll. This is usually expressed in a dollar amount for each $100 of payroll. So, for example, if your workers’ comp rate is $1.50, you’ll pay $1.50 per $100 you pay to your employees. For a business with $300,000 in payroll, this would work out to $4,500 per year.
  2. Where Do Your Employees Work? Workers’ compensation is regulated at the state level, which means rules and rates vary from state to state. Your business must comply with the states where your employees perform work — not necessarily where the business was founded or is based.
  3. What Do You Do? Your business is evaluated based on the jobs performed and the potential risk for physical illness or injury. Workers’ compensation premiums are calculated, in part, by the kinds of work performed. A logger or welder, for example, has a much higher risk of being injured than a clerical worker. It’s important to classify employees accurately — based on what they spend the majority of their time doing — because this could alter your premium (and coverage) dramatically.
  4. What’s Your Record? If there are lots of injuries or incidents at your workplace, you’ll end up paying a higher rate for workers’ comp. This is also true if your business is new, since you won’t have a long safety record. On the other hand, a lower rate of injuries and accidents will reduce your workers’ compensation costs in the future. This is one of the reasons why it’s so important to focus on creating a safe workplace.

Payroll and Business Size

When you get a quote for your workers’ compensation policy, it will be primarily based on the total gross annual wages of all of your workers. Your actual number of employees doesn’t affect the cost of workers’ comp – only their wages are taken into account.

However, the number of workers you have may affect whether or not you need to buy a workers’ comp policy. Most states treat full and part-time employees the same when you’re counting the number of employees at your business.

So even if you just have one part-time employee, you may be required to buy a workers’ comp policy. For example, in Colorado, workers’ comp is mandatory if you have any employees at all.

If you’re not sure exactly what your payroll will be for the year, it’s okay to make an estimate! During your end-of-year audit, your workers’ compensation cost will be adjusted based on your actual payroll. You’ll get a refund or a credit if you overpaid, or you will have to pay the cost difference if you underpaid.

Business Location

The location of your business has a lot to do with the cost of workers’ compensation. For example, the state’s general attitude toward businesses and workers affects cost.

In more worker-friendly states, courts are more likely to favor employees in workers' compensation disputes, thus resulting in more awarded claims and higher overall costs. This is one of the reasons why states like California typically have higher workers’ compensation costs compared to the rest of the country.

Additionally, rates can be adjusted statewide to reflect changes in the performance of the state’s workers’ compensation system as a whole. For example, lower healthcare costs and improved workplace safety could mean fewer claims, which ultimately can result in lower rates throughout the state.

The economic makeup of a state also influences rates; some state economies like those in Oregon or Washington center around high-risk industries like logging or trucking, whereas others have a lower risk of injury.

To arrive at a quote for a work comp policy, it’s important to understand how workers’ compensation rates are set — effectively the base “price” of the insurance coverage. Once again, because workers’ compensation is governed at the state level, requirements, rates, and available carriers will vary depending on your state insurance market.

Public, Private, And Hybrid Markets

Along with the above factors, each state has its own unique way of selling workers’ compensation insurance, and this can affect how much you’ll pay.

Some states like Georgia, have a private market for workers' compensation insurance. This means that employers can purchase a policy from any licensed insurance company in the state. With more options, small business owners can shop around for the most competitive quote.

Other states like Washington and Wyoming require businesses to purchase workers’ comp insurance through a state fund. This limits options and the opportunity to price shop.

In most states, the workers' compensation insurance market is a hybrid of the two. Businesses can purchase insurance from a private insurer or through the state fund, which competes with the private market.

This creates the most opportunity and leaves the state fund as a fallback for hard-to-insure businesses. California is an example of a state that offers both a state fund and private workers’ compensation insurance.

Keep in mind that both your insurance agent and carrier must be licensed in your state, and your business must comply with the states where your employees work — not necessarily where the business was founded or is based. Be sure to refer to your state’s resources, or talk to an insurance agent about securing policies that comply with each state.


The nature of your business activities is the biggest factor affecting how much you’ll pay for workers’ comp. Basically, the higher the risk of workplace injury is at your business, the more you’ll pay for workers’ comp.

This makes sense when you think about it. A construction worker has a much higher risk of being injured or even killed on the job when compared to an IT administrator. Insurance companies set their workers’ compensation premiums accordingly.

However, insurers know that not everyone has the same role in a business. This is where classification codes come in. These are codes that are assigned to each person who works at your company, based on the type of work they perform.

For example, let’s say you run a plumbing business and have three full-time plumbers on your payroll. They would be assigned class code 5183, which is the class code assigned to “General Plumbing Operations.” You also have a full-time receptionist and a part-time accountant. These two workers are assigned class code 8810 for “Clerical Work.”

These class codes will be used to determine the cost of workers’ compensation. Your plumbing employees will have a higher risk of injury, so their workers’ comp rates will be a bit higher. And your receptionist and accountant will have a lower risk of injury, so their workers’ comp cost will be lower. These amounts are then totaled in your insurance premium.

The class code system is a great way to make sure that businesses get a fair rate from insurers. Workers’ comp rates are calculated differently for each class code, and this ensures that you’ll pay an accurate rate based on the true risk of workplace injuries at your company. We’ll discuss these in more detail in a later section of this guide.

Claims History

Finally, an Experience Modification Factor, or “Ex-Mod” for short, is used by most insurance companies to determine your business’s level of risk. Basically, this is an overview of how many claims your company has made over the last few years.

If your business is brand-new, you will not have an Ex-Mod. This is because it takes up to three years for rating agencies like the NCCI to calculate your Ex-Mod.

Some very small businesses also may never get an Ex-Mod. This is because most states have qualification requirements based on how much you pay for workers’ comp. For example, in Missouri, you will only get an Ex-Mod if you pay more than $7,000 in workers’ compensation premiums per year.

So, what is an Ex-Mod? It’s a quick way of expressing the overall safety of your workplace environment. A ratings agency like the NCCI or your state agency will use actuarial data about workplace injuries in your state to come up with your Ex-Mod rating.

The “average” workplace is assigned an Ex-Mod rating of 1.0. If your workplace has more than the average number of incidents, your Ex-Mod will be higher than 1.0. And if your workplace has fewer than the average number of incidents, your Ex-Mod will be lower than 1.0.

Once you get an Ex-Mod, it’s mandatory for insurance companies to use it. They will use your Ex-Mod to determine how much you’ll pay for workers’ compensation. This will usually influence premiums by 10% to 25% in either direction.

If your workplace is safer than average, you’ll pay less in workers’ compensation costs. And as you might have guessed, you’ll pay more for workers’ comp if you have a higher-than-average rate of injuries and incidents. If you want to save on workers’ compensation insurance, a safe workplace is a must!

Calculating Workers’ Comp Insurance Costs

We’ve already outlined the varying factors that impact the average cost of a workers’ comp insurance policy, but to estimate what policy quotes might look like for your business specifically, you’ll need to take a closer look at the numbers. This includes gathering salary information for each employee, knowing your class code(s), and determining cost per employee.

To put it into a formula: Estimate your workers’ compensation cost by dividing total payroll by 100, then multiplying that number by your workers’ compensation insurance rate:

(Annual Employee Payroll / 100) x Workers’ Compensation Insurance Rate = Estimated Workers’ Compensation Cost

For example: A rate of $3.00 means that a business with $100,000 in payroll would pay $3,000 annually in work comp premiums. Let’s dive a little deeper, and take a look at some hypothetical businesses, what their workers’ compensation costs will be, and how things can change from state to state.

>> Want help? Check out our free cost calculator <<

Average Costs and Examples

So, how do you calculate the cost of workers’ compensation? In this section, we’ll use a fictional company to show you how workers’ compensation costs are calculated. We’ll also compare this company’s rates between two states to show you how state-by-state rates can influence costs. Let’s get into it.

Calculating Workers’ Comp Costs Step By Step

Let’s say you run a landscaping company in Florida called Better Gardens LLC. You have a total of three full-time landscapers, as well as two part-time landscapers.

To make things simple, let’s say all three full-timers make $35,000 per year, and the part-timers make $17,500 per year. That adds up to a total of $140,000 in payroll. These workers are covered by class code 0042 for landscaping.

However, you also employ a full-time receptionist who makes $25,000 per year, as well as a part-time accountant who makes $20,000 per year. These workers are covered by class code 8810 for clerical work.

So, how do you figure out the total cost you’ll pay for workers’ comp? First, let’s look at the landscapers. First, we’ll divide their payroll by 100.

140,000 / 100 = 1400

Then, we’ll need to multiply this by Florida’s workers’ comp rate based on their class code. As of the most recently available data, this was $5.83.

1400 x $5.83 = $8162.00

However, we’ll also need to perform this calculation for the receptionist and bookkeeper. Obviously, clerical work has far fewer risks than landscaping, so their costs will be lower. Again, we’ll start by dividing their payroll by 100.

45,000 / 100 = 450

Then, we’ll multiply this by the current workers’ comp rate for clerical workers in Florida, which is $0.15.

450 x $0.15 = $67.50

As the final step, we’ll just need to add the total cost of workers’ comp for all of these employees together.

$816.20 + $6.75 = $8229.50

In total, Better Gardens LLC will be paying $8,229.50 per year for workers’ compensation, based on a total payroll of $185,000. And as you can see from the math, the five landscapers are much more expensive to cover than the two office workers. Since the landscapers are much more likely to be injured on the job, this makes sense.

Illustrating How Different States Affect Workers’ Comp Rates

As we’ve mentioned a few times so far, workers’ comp rates can vary quite a bit state by state. To illustrate this, let’s repeat the calculations we did above – but using workers’ comp rates in California rather than Florida.

Again, we’re working with three full-time landscapers and two part-time landscapers who make a combined total of $140,000 in payroll. Let’s divide that by 100:

140,000 / 100 = 1400

Then, we’ll multiply this by the California workers’ comp rate for Class Code 0042 - Landscaping, which is $4.49.

1400 x $4.49 = $6286.00

Next, let’s repeat this with the two clerical workers who make a total of $45,000.

$45,000 / 100 = 450

Then, we’ll multiply this by the California workers’ comp rate for Class Code 8810 - Clerical, which is $0.20.

450 x $0.20 = $90.00

Then, the final step is to add both of these figures together.

$6286.00 + $90.00 = $6376.00

So, using these California rates, Better Gardens LLC will pay $6,376 for workers’ compensation based on a total payroll of $185,000.

That’s a fair bit less than the $8,229.50 that the same business would pay in Florida. This is a good example of how state-by-state workers’ comp costs can fluctuate, even with the same number of employees and the same payroll.

But you may be wondering exactly how different states come up with their workers’ compensation rates, and why rates vary from state to state. Read on and get the answers!

How Rates are Determined

Because each state’s industries, workers’ comp laws, and regulators are different, each state has different rates. State law dictates who needs to carry workers' comp insurance, where you can buy it, and which workers must be covered by the policy.

But how are rates actually determined? Rates are set by collecting and analyzing workers’ compensation claim data from all businesses operating within that state. Then, this information is processed and rates are set by one of the following organizations:

  • The National Council on Compensation Insurance (NCCI)
  • A rating bureau within the state’s regulatory body
  • A state rating bureau independent of the regulatory body

Every state is different. So if you’d like to learn more, you can click here to find out what ruling body sets workers’ compensation rates in your state.

There are also "base rate” states. These are not that common. But some states (like Florida) require all insurers to use the workers’ compensation rates set by the state rating agency.

In base rate states, credits and debits may be applied by the insurer to adjust premium prices slightly. However, the cost of workers’ compensation insurance will be largely the same from one insurance company to the next.

Most states are not base rate states. In this case, the state rating bureau publishes a set of rates to be used as a benchmark. Then, insurance carriers submit their own rates to the state’s regulatory body for approval.

For example, if the state issues a rate recommendation of $1.50 per $100 of payroll, an insurance company could charge more (or less) than this rate depending on market conditions. In this system, rates and therefore workers' compensation quotes may vary widely between insurers.

So by shopping around, you can always get the coverage you need while reducing your overall workers’ compensation costs.

Finding Your Classification Code

Classification codes (“class codes”) are key to determining the final cost of a work comp premium. Defined by the NCCI or the state, class codes are assigned to a business based on the type of work employees do. This code corresponds to a standardized list of industries, and it’s a way for insurance carriers to categorize companies.

Basically, a class code is a quick identifier used to assign the risk of injury to a particular worker. A higher workers’ compensation cost applies to businesses that employ workers with high-risk class codes.

For example, trade contractors will pay more for coverage than office workers. This is why it’s important to make sure your employees are classified properly. If they aren’t, you could be paying more than you need to for workers’ compensation premiums.

To find out your class code, it’s best to work with an insurance agent that specializes in work comp. They can help you most accurately classify your business, modify your class code as needed, and avoid paying the wrong rate for the wrong classification.

Want to do it yourself? You can also use WorkCompOne’s online quoting tool to find your classification code through a keyword search.

Examples of Workers' Comp Class Codes

Wondering what class codes may be used at your business? Here are a few examples of class codes used in various industries. There are nearly 800 unique class codes, so this is just a small sample:

  • Carpentry (5403)
  • HVAC (5537)
  • Janitorial services (9014)
  • Landscaping (0042)
  • Plumbing (5183)
  • Coffee, tea or grocery dealer - Retail & salespersons (8017)
  • Clerical office employees (8810)

It’s important to note that some businesses have only one class code, whereas others may have several. For example, if you’re a carpenter and your only other employee is an apprentice, you will both be covered by class code 5403 for carpentry, and no other class codes will apply.

A carpentry business that employs five full-time carpenters, one receptionist, and one salesperson will have the “governing class code” of 5403. A “governing class code” is the code that the majority of employees are covered by at the business, and the primary work that company performs.

However, the receptionist and salesperson in this hypothetical business will be assigned the class code 8810. This is because although they are working at a carpentry business, they are not carpenters, so their risk of workplace injury is lower than the other employees at the business.

Understanding and Influencing Your Premium

When it comes to what your business will pay in total workers’ compensation costs, it’s important to recognize that there are factors that are both in your control and out of your control. Here’s a quick summary of these factors: In Employer’s Control Out Of Employer’s Control Total payroll State workers’ comp laws Workplace safety practices Classification codes Hiring full-time workers vs. contractors* Base workers’ compensation rates

What Influences Workers' Comp Insurance Costs 

In Employer's Control  Out of Employer's Control 
Total payroll State workers' compensation laws
Workplace safety practices Classification codes
Whether to hire employees or contractors* Base workers' compensation rates

* Remember to follow the common law guidelines of what constitutes an employee (W-2) versus a contractor (1099). Hiring a worker as a contractor may not be sufficient if they otherwise meet the criteria of an employee.

Tips for Minimizing Your Workers’ Compensation Premiums

We understand that small business owners are always looking for ways to do more with less. How can you minimize your workers’ compensation costs while still abiding by the law and protecting your employees? Let's get into it.

Promote Workplace Safety

Workers’ comp insurance companies use your claims history to determine how safe your workplace is and how likely you are to have future claims. Any claim, big or small, will lead to higher premiums.

On the other hand, going months or even years without a claim will reflect a safe working environment. Your business will be less “risky” to insurers, and they’ll adjust your rates accordingly.

Therefore, the best way to keep your workers’ compensation costs in check is to prevent accidents from happening and operate a safe workplace. There are tons of strategies you can implement to improve worker safety. Here are just a few suggestions:

  • Identify the most common workplace accidents and injuries
  • Build employee training plans around these accidents
  • Ensure equipment and tools are properly maintained
  • Reward employees for safe behavior
  • Use proper labeling and signage at your business

Of course, not all accidents are avoidable. But by taking steps to reduce the frequency and severity of workplace accidents, you can keep employees safer and even save a few bucks on workers’ compensation premiums. We call that a win-win.

Check Your Classification Codes

Insurance carriers calculate work comp premiums, in part, by evaluating the kinds of work a business performs. So as your business grows, it's important to double-check the class codes of each employee and make sure that they're accurate.

As mentioned earlier, businesses are assigned a “governing class code.” This represents the overall product or service provided by your company and represents the workers who make up the bulk of your payroll.

For example, if you run a trucking company, most of your employees are probably truckers, and are covered by the class code 7219 for Trucking. However, you may also employ dispatchers, salespeople, bookkeepers, and other employees. They won’t be covered under class code 7219, and will likely be under class code 8810 for Clerical Workers – which is a less risky, cheaper category.

Making sure that each and every worker is classified accurately will help you reduce your workers’ comp costs. So when it’s time to renew your policy each year, take another look at your workers and payroll, and make sure all classification codes are accurate and updated.

Review Payroll Annually

You should also review payroll annually to make sure that you’re estimating your payroll correctly. Inaccurate estimates could lead to underpayments or even overpayments. For workers’ compensation purposes, payroll includes all of the following types of compensation:

  • Wages
  • Bonuses
  • Overtime pay
  • Holiday, vacation and sick leave pay
  • Social Security and Medicare tax contributions (payments by employer for the employee part)
  • Commissions, profit sharing or incentive plans
  • Prevailing wages
  • Annuity plans

Gratuities and fringe benefits (like driving a company car) are excluded. For more details about how to calculate payroll accurately, check out this post from WorkCompOne.

Build Medical Provider Relationships

Particularly for larger businesses, it’s important to develop relationships with medical providers in your area. When employees get appropriate, high-quality medical treatment for work injuries, they can return to work faster – reducing the overall claim cost.

Excellent medical care also results in fewer delays and complications as employees recover. With a great medical provider relationship, you can enjoy streamlined communication, ensure that employees get appropriate treatment, and speed up the overall claims process.

Payment Options and Plans

Taking another look at how you pay for workers’ compensation insurance can also help you manage your premiums. Most insurers use traditional plans, but some insurers have also introduced “pay as you go” plans for additional flexibility. Here’s what you need to know:

Traditional Plans

With a traditional plan, you’ll get an annual quote for the cost of your workers’ compensation premiums, based on your total payroll and the other factors outlined above. Then, you can pay for the entire policy at once or split it into quarterly or monthly payments, depending on the insurer. Some insurers may offer a discount if you pay for your whole annual premium at once.

Then, at the end of the year, your insurer will audit your policy based on your actual payroll. If you underestimated your payroll, you’ll pay a little more. And if you overestimated your payroll, you’ll get a credit toward next year’s premiums.

Pay-As-You-Go Plans

Also called “payroll reporting” plans, pay-as-you-go plans are a relatively recent innovation in workers’ compensation insurance. In this type of plan, you work directly with your payroll provider or tax professional to pay your workers’ compensation premiums based on your actual payroll for each pay period, rather than relying on an estimate.

So for example, if you actually pay out $15,000 in a monthly pay period, you’ll make your workers’ compensation payment based on that amount. This helps eliminate the need for estimates and allows you to make payments based on your actual payroll.

Audits are still done on pay-as-you-go plans, but choosing this method helps reduce both underpayments and overpayments. A pay-as-you-go plan can also help free up cash flow for small business owners, which is always a plus.

Tips for Buying Affordable Workers’ Comp Coverage

So, now that you understand the concepts behind the cost of workers’ compensation, you may be wondering how you can make sure you get the best coverage at the lowest price. Here are a few tips that may help you as you shop for affordable workers’ comp coverage.

  • Implement workplace safety programs – A formal, recognized program introduced by the employer will be recognized by most insurance companies. Talk to your insurance agent or carrier to find a program that qualifies.

  • Owner exceptions – In some states, employers can choose to exempt themselves from workers’ compensation coverage, which can lower payroll and therefore premiums.

  • Formal training programs – Many structured safety training programs, such as a 90-day program for new hires, can result in a credit on your policy. Check with your insurer to see what credits they may have to offer.

  • Formal safety administrative position – In larger businesses, a Chief Safety Officer or similar role might be necessary and beneficial to control costs and ensure workplace safety.

  • Payment plans – Many carriers offer a variety of payment plans (annual, semi-annual, quarterly). Paying in larger installments won’t usually affect your premium, but it will reduce billing fees tacked onto each payment. These savings can add up for small businesses.

  • Payroll reporting — An increasingly popular option, payroll reporting allows businesses to pay a more exact premium on a monthly basis. Traditional premiums are based on estimated payroll, and the difference is billed or credited after an annual audit.

    With payroll reporting, the business owner is responsible for reporting the company payroll for that month and is billed for that amount. For businesses that keep a close eye on cash flow, this can be a good alternative.

  • Avoid gaps in coverage – You may be tempted to cancel coverage when you don’t think you need it, but this is not usually a good idea. Like in other types of insurance, gaps in coverage make you look more risky to potential insurers. That can result in bigger premiums.

  • Don’t under-insure your business – Don't under-insure your business. Insuring your business for less than its true payroll can be a pricey mistake. Annual workers' compensation audits could result in an unexpected adjustment that cripples your cash flow. Or, you could suffer a claim and not have sufficient coverage.

    Also, make sure your policy is comprehensive. If you're going to have employees in multiple states, or employees traveling across state lines to work, make sure your policy covers these states as well.

Workers’ compensation insurance protects your business legally and financially. Ready to get started? Working with an experienced insurance agent, you can get the coverage you need at a fair, affordable price – and avoid overpaying.

FAQs About Workers’ Compensation Insurance Cost

We understand that workers’ compensation can be complicated. So if you’ve got more questions, take a look at the answers to these FAQs, or feel free to reach out to the experts at WorkCompOne for more information.

How many employees can I have before I need workers’ comp?

This depends on your state. In some states like Ohio, you need workers’ comp insurance if you have a single employee. In Alabama, you don’t need workers’ comp until you have five or more workers. And in Texas, workers’ compensation is never mandatory, no matter how many employees you have. Wondering about requirements in your state? Check out our state-by-state guide for more info.

Will I pay more for workers’ comp if my business is new?

New businesses don’t necessarily pay a higher rate for workers’ compensation insurance. But since your business is new, you won’t yet have an Ex-Mod or claims history. This means that it may be more difficult to find coverage from a workers’ compensation insurer. You may have to work with more insurers and get multiple quotes to find a company that’s willing to work with you and insure your business.

Can I hire an independent contractor to avoid paying workers’ comp?

In most states, independent contractors are not required to be covered under workers’ comp. Instead, they carry their own workers’ compensation policies. Though you should check your state’s policies, this generally means that you don’t need to pay for worker’s compensation when hiring contractors.

However, this does not mean that you can misclassify employees as contractors to avoid paying for workers’ compensation. Doing so could lead to serious legal penalties and fines. Find out more about the differences between contractors and employees.

How is workers’ comp insurance different from liability insurance?

Workers’ compensation is meant to protect your workers and compensate them if they are injured while at work. Liability insurance, on the other hand, covers everyone who isn’t your employee.

So, for example, if a customer slips and falls at your store and injures themselves, your liability insurance would cover their medical costs and/or legal fees. But if an employee slips and gets injured, this would be covered by your workers’ compensation policy instead.

What happens if I don’t have workers’ compensation insurance?

If you don’t have workers’ compensation insurance and an employee is injured on the job, you can be sued for their medical costs, lost wages, and pain and suffering. If you were legally required to carry workers’ compensation and you didn't purchase a policy, you may also be subjected to additional fines, penalties or even criminal charges.

Because of this, it’s very important to purchase a policy as soon as you are required to by state law. Workers’ compensation is just as important for your protection as it is for the protection of your employees.

How do I buy workers’ comp insurance for my business?

This depends on your state. You can get a quote directly from an insurance company, work with an insurance broker, or even get a policy directly from the state bureau of workers’ compensation. If you’re ready to take the next steps, you can get a quote from WorkCompOne now.

Next Steps and Resources

If you’re ready to purchase a workers’ compensation policy for your business, WorkCompOne is here to help. With our online quoting tool, it’s easy to get a quote and find the right policy for your employees. Get started now and you can get a quote within just a few minutes. You can also use our free downloadable workers’ compensation calculator if you’d like to calculate your expected workers’ comp costs on your own.

Want to dig deeper? You can also set up a consultation with one of our experts and get answers to all of your questions about workers' compensation. At WorkCompOne, we’re happy to provide the guidance you need to make the right decision for your company.