Workers' Compensation Insurance Cost
Small business owners nationwide who purchased a new workers’ compensation policy through the Progressive Advantage® Business Program in 2019 paid an average of $85 per month. But is this what you’ll pay?
Probably not. Rates vary across businesses because workers’ comp is state regulated and calculated differently than most other insurances. For example, if we list these same policies in numerical order according to cost, the policy in the exact middle (median) is only $68 per month.
That’s quite a difference. This suggests that a few expensive policies are causing the calculated national average to be higher than what most policies cost. The best way to get an accurate rate for your business is to get a personalized quote.
While there isn’t a universal rate, you’re typically required to have workers’ comp coverage if you have employees. That’s why it’s important to learn what affects your premium and what you can do to secure a more affordable rate.
Basic factors that influence the cost of workers’ compensation insurance include:
Your employee’s risk
Some professions are higher risk than others. That’s why the National Council on Compensation Insurance (NCCI) developed a business classification system that calculates a rate according to an employee’s level of risk. These rates vary among states.
Riskier jobs usually have a higher rate. For example, an electrician might have a higher rate than an accountant because they’re more likely to become injured at work.
Your annual payroll is used to calculate your annual workers’ comp insurance cost. Be prepared to provide this information when getting your quote.
Your claims history
Has your business faced workers’ compensation claims in the recent past? If so, you could see an increase in your workers’ comp cost.
Your insurance company might review your claims history and base your rate on the number and severity of past accidents.
Each state has their own unique set of workers’ compensation laws, so rates will vary depending on where you work. Higher-risk areas usually have larger premiums.
Searching for cheap workers’ comp insurance?
You’re in business to make money so you don’t want to over-pay for insurance. But how can you get the cheapest workers’ compensation insurance when many factors are out of your control?
The answer is simple. Minimize your risk for a claim. Here’s a few tactics that could help:
- Employee training – Properly training your employees on basic job functions could reduce the risk of injury. For example, a restaurant owner might train their kitchen staff on safe food preparation procedures to avoid cuts and burns.
- Safety standards – Educating your employees on safe work practices might prevent slips, falls and other bodily harm. A manufacturer, for example, might educate its workers on proper lifting and carrying techniques, or implement a process for cleaning up spills.
- Property maintenance – Providing a safe and healthy work environment can reduce employee illnesses and injuries. This could include tasks like air duct cleaning, routine building inspections or snow removal.
Quote and purchase through the Progressive Advantage® Business Program
We’ve partnered with select insurance companies who underwrite workers’ compensation insurance. Our licensed professionals can help you with your quote, and you can buy directly over the phone.
You can also start a workers’ comp quote online.