What is Workers’ Compensation Insurance?Workers' Compensation insurance (also known as Workers’ Comp or Workmans’ Comp) helps protect your business from the costs associated with a work-related injury or illness. Typically, it would pay for medical bills and recovery costs, as well as some of the missed wages. In the event of a death, Workers’ Compensation insurance can help with the costs of the funeral or death benefits to the employee’s family. Workers’ Comp can also help cover legal expenses if an employee sues the business over an injury that isn’t covered by the policy.
Am I Required to Have Workers’ Compensation Insurance?Nearly every state in the U.S. requires you to carry Workers’ Compensation insurance; most require it as soon as you hire your first employee (sometimes even part time or temporary employees). That being said, each state’s stipulations are a bit different, so make sure you view our state guides: Workers’ Compensation Laws and Regulations by State.
Even when insurance is not required by law, we strongly encourage you to carry Workers’ Comp if you have any employees at all because you’re still liable for the cost of workplace injuries, which can be substantial. According to the National Safety Council, the average occupational injury or death costs $33,355. According to the Bureau of Labor Statistics, the median days away from work due to a non-fatal occupational injury/illness is 8 days.
Is Workers’ Compensation Insurance Worth It?Absolutely! Workers’ Compensation is a type of liability insurance that directly benefits your employees. As your employees are the backbone of your business, it’s important to protect them. Not only is it the right thing to do, it protects your business, as well. Being hit with pricey medical costs and/or lawsuits could bankrupt your business if you don’t have insurance coverage.
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 a median rate could range from $0.82 per $100 (North Dakota) to $3.08 per $100 (New York). Rates will vary by industry, as well. 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.
These are just the average state rates across all sorts of industries. 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.
How Do I Get the Best Price on Workers’ Comp Insurance?Since there are a lot of factors that go into deciding how much an insurance company will offer their Workers’ Compensation Insurance to you for, it's important to shop your insurance to make sure you can find great coverage at the right low price. There's this great company called Talage that makes shopping for insurance super easy on you. Luckily, you've found us!
We just ask you for your business information once and then we do the heavy lifting of shopping our A-rated insurance company partners so that we can provide you with multiple quotes online right away (typically less than 10 minutes from start to finish). You get to see what these companies are offering their coverage for and choose the best policy for you. Often times, this means you also choose the one that offers great coverage at less cost than other insurance companies. You get to see the prices and decide for yourself! If you’re ready, you can shop for quotes right now.