HomeBusiness InsuranceHow Much Is Workers’ Comp Insurance?

How Much Is Workers’ Comp Insurance?

Industry Cost per month
Construction and contracting $254
Cleaning services $147
Food and beverage $107
Retail $83
Consulting $37
IT and technology $34

For a free no-obligation custom quote, contact our partner Gallagher Small Business to speak with a small business expert: 833.810.5726.

Factors Influencing Cost

Workers’ compensation insurance premiums are unique to each business. Here are some of the factors that impact the cost of workers’ compensation. 


The state where your employees work affects the cost of your insurance policy. For example, the average cost of workers’ compensation in California is $62 per month, and the average premium in Florida is much cheaper at $46 per month. North Dakota, Ohio, Washington, and Wyoming require businesses to purchase worker’s comp from a state fund, which is usually more expensive than getting coverage from a private insurance company.

States with a higher risk of catastrophic events and natural disasters can have higher workers’ comp premiums.

Number of Employees

The number of employees you have on your payroll is another factor that impacts the cost of workers’ compensation insurance. In general, businesses with more employees pay higher workers’ compensation rates than businesses with a small workforce. When you have more employees, there’s a greater risk of workers’ compensation claims, which may lead to a higher premium.

For example, the average workers’ comp rate is $40 per month for businesses with two employees, but, for a business with 10 or more employees, the average rate is $116 per month.

Annual Payroll

Workers’ compensation premiums are calculated based on your company’s average weekly employee wage and which state your business is located in. Your premium will be calculated as a fixed rate for every $100 of your average weekly payroll. As a result, companies with a higher payroll usually pay more for workers’ compensation insurance than businesses with a lower payroll. 

Type of Work

Commercial business insurance companies use National Council on Compensation Insurance (NCCI) class codes to calculate your premium. These class codes correspond to the type of work your employees perform. Insurance companies use the class code to determine your level of risk and how it affects your premiums. 

Fifteen states do not use NCCI class codes: California, Delaware, Indiana, Michigan, Massachusetts, Minnesota, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Washington, Wisconsin, and Wyoming.


When you apply for a workers’ compensation policy, you’ll provide information about your business and industry. If your business is part of a riskier industry, like construction or contracting, you can expect to pay a higher premium. Businesses in IT or consulting generally pay lower rates because there’s a lower risk of employee injuries and illnesses.

Workers’ Comp Claim History

Workers’ compensation insurance companies assign your business an experience modification factor, which is based on your claim history. It’s used to determine how likely you are to file insurance claims. If you’ve filed any workers’ compensation claims in the past, you’ll likely pay higher rates for coverage. 

Top Workers’ Compensation Insurance Companies

Most commercial insurance providers sell workers’ compensation policies. However, it’s a good idea to compare several insurers before choosing one. Here are some of the top workers’ compensation insurance companies.


Insureon is an online small business insurance marketplace that is licensed in all 50 states. Insureon’s workers’ compensation insurance policies are underwritten by reputable insurers such as Nationwide and The Hartford. Insureon serves many industries, including food and beverage, cannabis, landscaping, real estate, and construction.

BiBerk Insurance Services

BiBerk, which is owned by Berkshire Hathaway, offers affordable commercial insurance to many businesses. The company claims its workers’ compensation policies cost up to 20% less than competitors. Quotes are available online which can help you compare BiBerk to other companies.


CoverWallet is an online insurance broker that connects you with quotes from top-rated insurance companies. Through CoverWallet, you can purchase workers’ compensation that is underwritten by companies like Markel, Hiscox, Progressive, and Travelers. CoverWallet offers online quotes, or you can call an agent to get quotes.

The Hartford

The Hartford is the second-largest underwriter of workers’ compensation insurance in the U.S. The company’s workers’ compensation policies include a variety of benefits, like a preferred medical provider network, a needle-stick reimbursement program, pay-as-you-go policies, and case managers that oversee employee medical care.


Through the Progressive Advantage Business Program, you can purchase workers’ compensation policies in 43 states. However, Progressive partners with other companies to underwrite its policies. The company that underwrites your workers’ compensation policy depends on your location.


Nationwide has been selling commercial insurance policies for almost 100 years and serves thousands of businesses across many industries. Some of the standout features of Nationwide’s workers’ compensation include loss control services, access to 24/7 nurse triage, and resources for helping employees return to work after an injury.

GTM Payroll Services

GTM Payroll Services exclusively offers workers’ compensation for household employers. If you need to get workers’ compensation for a nanny or housekeeper, GTM Payroll Services might be a good option. The company also offers payroll services, tax filing assistance, health insurance, and 401k plans.

How to Save Money on Workers’ Compensation Insurance

Workers’ compensation premiums are different for every business. You might pay a higher rate if you have many employees on staff or work in a high-risk industry. Here are several ways to lower your workers’ compensation insurance costs.

  • Prioritize workplace safety: If you prioritize workplace safety in your business and injury rates decline, you could lower your policy premiums. Consider training your employees regularly on job safety, hiring a risk manager, implementing a written accident prevention program to potentially reduce your costs, or setting up a safety committee. Additionally, many insurers offer services that can help increase workplace safety.
  • Use the correct class codes: During the workers’ comp application process, you’ll need to enter class codes for each of your employees. Make sure you choose the correct class codes, as mistakenly entering a class code for a high-risk job could increase your premiums.
  • Choose a pay-as-you-go policy: When you purchase worker’s comp, choosing a pay-as-you-go payment structure can help you manage the cost. With pay-as-you-go, you pay your workers’ comp premium as you process payroll, so there’s less risk of overpaying or underpaying during the year than you’d have if you made premium payments based on projected payroll.

How to Choose the Best Workers’ Compensation Insurance 

Not all workers’ compensation policies are created equal. Before you buy workers’ compensation insurance for your business, consider the following to ensure you choose the best policy. 

  • Evaluate your coverage needs: Think about how much coverage you need based on the number of employees you have, your industry, and the type of work your employees do. The more risk your employees face at work, the higher your coverage limits should be.
  • Understand your policy: As a business owner, you need to understand what your workers’ compensation policy covers. Know what injuries and illnesses are and are not covered, how much coverage you have, and what benefits your employees will receive if they file a claim. 
  • Know your state’s workers’ comp laws: Every state has different workers’ compensation rules and regulations. You should understand these laws and make sure you’re purchasing enough coverage to satisfy the requirements.
  • Compare several quotes: Workers’ compensation premiums can vary between insurance companies. To get the most affordable policy, shop around and compare quotes from several insurance providers.  

What Is Workers’ Compensation Insurance?

Workers’ compensation insurance provides financial protection for business owners if an employee gets injured or sick at work while performing or due to work-related duties. Workers’ compensation policies cover the employee’s medical expenses, rehabilitation costs, and lost wages.

Where Do You Get Workers’ Compensation Insurance?

In most states, you can purchase workers’ compensation insurance from private insurance companies or insurance marketplaces like Insureon. However, if your business is based in North Dakota, Ohio, Washington, or Wyoming, you typically must purchase workers’ compensation from a state fund.

What Does Workers’ Compensation Insurance Cover?

Workers’ compensation covers an employee’s medical bills, rehabilitation expenses, and missed wages. Workers’ comp also pays a death benefit if an employee is killed in a workplace accident. Some states have regulations around the types of illnesses and injuries that qualify for workers’ compensation reimbursement.

Do I Need Workers’ Comp Insurance?

If you own a business with employees, workers’ compensation insurance  is a legal requirement in every state but Texas. However, some states only require companies to carry workers’ comp if they have a minimum number of employees.

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