What Does Workers’ Compensation Insurance Cost?Don’t you hate when somebody answers your question with “it depends?” Well, then you’re not going to like this… it depends. Workers' Comp insurance rates vary from state to state but recently average about $1.70 per $100 in payroll. So, for a $500,000 payroll, the average rate may be $8,500. Since it's different for each state, that means rates could range from $0.82 per $100 (North Dakota) to $3.08 per $100 (New York). It's important to note that these are just the average state rates across all sorts of industries. Speaking of which, your industry also plays a role. For example, a restaurant in Nevada may pay $0.77 per $100 payroll whereas a similar restaurant in California may pay $4.34 per $100 payroll. For contrast, clerical work in California may only cost you $0.40 per $100 in payroll.
Your final cost for Workers' Compensation Insurance depends on a number of factors, including:
- State laws: Each state has its own requirements for Workers’ Comp. Some states may even dictate coverage requirements. See our State Insurance Guides for more information about what is required in your state.
- Industry: Certain industries present a higher level of risk for insurance companies than others.
- The kind of work your employees do and the related risks: Much like industry, some types of work are inherently more dangerous. A team of accountants is much less likely to have an occupational injury than a team of roofers. With a greater risk of injury, your team may cost more to insure with Workers’ Comp.
- Number of employees: More employees means there’s a higher probability that someone will experience a work-related injury or illness.
- Size of your payroll: Since Workers’ Compensation helps pay an employee’s wages while they’re unable to work for a work-related injury or illness, higher wages usually mean higher Workers’ Comp costs to cover lost wages.
- Your history of claims: If you have a history of having Workers’ Compensation claims, then an insurance company has to presume that you will continue to have similar claims and therefore it makes you more risky to insure.