What does your state require for workers' comp insurance?

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How to determine how much workers' compensation insurance will cost you
To figure out your total workers' compensation insurance cost, consider the following questions.


To understand your workers' compensation requirements, you need to check your state laws. Only Texas doesn't mandate that companies provide workers' compensation for their employees. State laws also require regular audits new zealand phone numbers of your workers' comp policies to ensure you are paying an appropriate amount for the risk exposure your people face on the job.

"Since workers' compensation laws are regulated at the state level, business owners should first determine when workers' compensation insurance is required for their business," Somers said. "Usually, it's as soon as they hire an employee." [Interested in the best business insurance providers? Check out the ones we recommend.] 

Some states exempt you from getting workers' comp coverage if you are the sole employee of your business. Before you use this exemption, Somers suggests weighing the potential expense of the claim against the cost of insurance.

"Since most health insurance plans exclude coverage for work-related injuries, sole proprietors may be putting their livelihood on the line if they opt to skip workers' comp coverage for themselves," he added.

2. What is the average age of your workforce?
"As employees age, the propensity for injury increases," Lovejoy said. "At the same time, a younger workforce brings about less experience and an increased chance of on-the-job injury."

Risk is also increasing for older members of the workforce as more Americans delay retirement. The U.S. Census Bureau projects that more than 30% of Americans ages 65 to 74 will still be working by 2026. Older workers tend to have a harder time proving that their injuries or illnesses happened on the job, given their higher occurrence of preexisting conditions, so make sure your employees are aware of their rights.

3. What risks do your workers face?
Many factors impact how much workers' compensation coverage a business owner needs and how much it'll cost, including the risks workers face.

"With higher levels of risk comes the need for high levels of coverage," Lovejoy said. "A roofing contractor obviously has a higher risk than someone working in a jewelry store."

Risk factors will determine the cost of your workers' comp insurance. For example, in the state of New York, workers' comp for roofers is $32.42 per $100 of payroll, while it's only $2.17 per $100 for retail employees.

While strong safety standards and procedures can offset the danger, the more hazards your employees face, the more coverage you should consider. Common risks associated with construction include falls, trench or scaffold collapse, electric shock, and repetitive-motion injuries, according to the Occupational Safety and Health Administration. [Learn more about OSHA compliance.]



4. What are the financial risks?
Some cities and states have higher costs of living than others. That means employees need to make more to achieve a similar standard of living. It also means the uninsured costs of medical treatment are higher. Therefore, their losses due to injuries on the job are higher than if they were employed in a different city or state, and they will need more workers' comp.