How much does Workers’ Comp Insurance cost?

Learn about workers’ compensation insurance cost, and get tips to lower your monthly premium.

Karen Solomon
By Karen Solomon
Published Apr 2, 2024
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What does workers’ compensation insurance cost? And most importantly, what will workers’ comp insurance cost your small business specific to your industry, location and employees?

Many states require business owners to carry coverage. But even if it’s not a mandate, a workers’ comp policy can help protect employees who suffer work-related illness or injury, and help protect your business from the financial loss of medical expenses, lost wages and more.

Learn more about workers’ comp insurance coverage, try the NEXT calculator to see your specific monthly or annual cost, or get a free quote.

Or, jump ahead to learn:

What does workers’ comp insurance cost?

NEXT workers’ compensation insurance policyholders pay an average annual premium of $1,020 ($85 per month) and a median premium of $660 ($55 per month).*

About 39% of NEXT policyholders pay under $45 per month for workers’ comp insurance.
  • About 39% of NEXT policyholders pay under $45 per month for workers’ comp insurance.
  • Source: NEXT Insurance

    However, the lowest premium for NEXT workers’ compensation insurance can start at just $14 per month.

    What you’ll pay for your small business will depend on your industry, location and work experience, as well as your insurance claims history and the policy limits you choose.

    To get specific about your cost for a workers’ compensation insurance policy, use our premium calculator or get a free quote.

    Examples of monthly median cost workers’ comp insurance cost by profession

    Auto repair shop$163
    Business consultant$25
    Carpet cleaner$128
    Fitness instructor$33
    General contractor$283
    Hair stylist$29
    HVAC contractor$211
    Personal trainer$32
    Property manager$85
    Real estate agent$23
    Retail store$75
    Yoga teacher$35

    Source: NEXT Insurance

    How insurance companies calculate the cost of workers’ comp insurance

    Insurance companies calculate your premium by considering several risk factors, including:

    1. Your type of business or industry

    Each job title in an industry is assigned a workers’ compensation classification code by insurance companies. And these codes help insurance companies decide on the risk level for each role.

    A workers’ comp premium can depend on the type of work that you do. In general, jobs that have higher-risk opportunities for employees to get injured or ill at work often have higher insurance costs.

    If you have a desk job such as an accountant, your workers’ comp policy is probably going to cost less than someone who performs very physical work with tools and machinery that are more risky to employees, such as construction.

    2. Your number of employees

    If you have five employees, your workers’ comp insurance is most likely going to cost more than if you’re a sole proprietor who works alone.

    If you have employees, many states legally require you to have workers’ compensation insurance to cover work-related illness and injuries.

    3. Your business location

    If you own a bakery in Chicago you’re probably going to pay more for workers’ comp insurance than if you sold bread and cupcakes in a small town in Idaho.

    Different states have different regulations. And the more populous the area, it’s more likely you’ll pay a higher premium.

    4. Your work experience

    The number of years you’ve operated a business in your industry can impact your insurance rate.

    For example, if you’ve been a caterer for 12 years without filing a claim, you may pay less than a caterer who’s been in business for one year because you have a proven history of workplace safety and success in your field.

    5. Your claims history

    Your record of safety, losses and claims can also have an impact on your insurance premium.

    For example, if your painter falls off a ladder and suffers an injury that requires a workers’ comp claim for medical costs and/or legal fees, you may see an increase in your insurance rate when it’s time for renewal.

    6. How you set your insurance coverage limits

    You can elect to have higher insurance coverage limits on your policy to give you more protection over more covered incidents. While more coverage can be a good thing, higher coverage limits can increase the cost of your policy.

    Note: These are only a few common factors that affect your cost. Insurance companies take many other external factors into account such as economic conditions and market trends.

    4 tips to help lower workers’ compensation insurance cost

    You can take control of several actions to help lower your insurance cost, including:

    1. Reduce your risk

    A physically safe and secure workplace environment can help limit the likelihood of accidents, workplace injuries and filing an insurance claim. And if you take action to reduce harm you’re more likely to keep your premium low.

    Consider enhanced safety practices in the workplace and on a job site, such as:

    • Installing a fire-retardant sprinkler system.
    • Installing more fire extinguishers and smoke detectors.
    • Upgrading your security system.
    • Minimizing tripping and falling hazards wherever you work.
    • Conducting regular safety checks and employee training sessions to keep your employees safe.

    2. Learn from previously filed claims

    Analyze your previous insurance claims and figure out what you could have done to avoid those events.

    For example, if you filed a claim because of employees who suffered a repetitive stress injury on the job, you could train employees to recognize early signs of repetitive fatigue, encourage exercise or physical training to help combat muscular strain or rotate employee tasks to prevent potential pain and injury.

    3. Choose a right-sized deductible

    If you choose a higher deductible for your workers’ compensation coverage, it’s quite likely that you will pay less for your premium.

    Compare the cost of different types of deductibles, such as flat-rate, percentage, or per occurrence and choose which works best for your small business.

    4. Bundle more than one policy

    With NEXT, you save up to 10% if you combine more than one type of insurance policy to create a secure business insurance package.

    For example, if you add general liability insurance to your workers’ comp coverage, you can benefit from more coverage at a cost savings.

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    How NEXT helps protect with small business insurance

    NEXT makes it fast, easy and affordable to protect your small business — and you can do it all online.

    We’ll ask a few questions about your business and give you an insurance quote. You can select your coverage options and purchase your policy — all in about 10 minutes. Your certificate of insurance will be available immediately, and you can access your policy 24/7 via web or mobile app.

    If you have questions, our licensed, U.S.-based insurance agents are available to help.

    Start a free quote with NEXT.

    * The cost data presented here are based on NEXT active customers in the U.S. who purchased workers' compensation insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in January 2024.
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    Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

    Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.