Compare Workers Comp Insurance

Workers' compensation is a state-regulated insurance program that pays medical bills and partial lost wages for employees injured on the job. In exchange, employees give up the right to sue the employer for most workplace injuries — the "exclusive remedy" rule.

It's required in 49 of 50 states (Texas is the lone exception), enforced through the state's workers' comp board or equivalent, and carried either through private insurance, a state fund, or — for large companies — self-insurance.

Five categories of benefits:

• Medical care. 100% of reasonable and necessary treatment for the work injury — no deductible, no copay.
• Temporary disability. Partial wage replacement (usually 2/3 of average weekly wage, up to a state cap) while the employee can't work.
• Permanent disability. Long-term benefits if the injury causes lasting impairment.
• Vocational rehabilitation. Retraining for a different job if the employee can't return to the old one.
• Death benefits. Funeral costs and survivor payments to dependents.

Workers' comp premium is calculated as (payroll / $100) × class code rate × experience modification factor. The class code is a 4-digit number (NCCI system in most states) that describes the type of work each employee performs.

Representative rates per $100 of payroll:

• Office / clerical (class 8810): $0.10–$0.30
• Restaurant (class 9082): $1.50–$2.50
• General contractor (class 5403): $4.00–$7.00
• Roofing (class 5551): $8.00–$15.00+

Your experience modification (ex-mod) starts at 1.00 and rises or falls based on your claims history relative to peers. An ex-mod of 0.85 cuts premium 15%; 1.20 raises it 20%.

Requirements vary by state, but the common thresholds:

• 1+ employee: most states (CA, NY, IL, MA, NJ, and 35+ others).
• 3+ employees: several southern states (GA, FL, NC, SC).
• 5+ employees: a handful (AL, MS, TN, VA).
• Optional: Texas only.

Independent contractors and 1099 workers generally don't count toward these thresholds — but misclassifying an employee as a contractor to avoid workers' comp is one of the most-litigated small-business violations in the country. When in doubt, consult a local employment attorney.

The high-leverage moves:

1. Audit your class codes. Misclassification costs employers millions; a clerical employee accidentally coded as a laborer can easily double premium.
2. Implement a safety program. Documented safety training, PPE, and return-to-work programs can qualify you for 5–15% credits.
3. Return injured workers to light duty fast. This is the single biggest driver of ex-mod — claims that resolve quickly cost 10x less than ones that drag on.
4. Shop every renewal. Rate variance between carriers for identical risks frequently hits 20–30%.