Workers’ compensation insurance cost

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No matter how careful you are, accidents happen at work that can injure your employees or even you. That’s why buying workers’ compensation insurance is an important part of starting a business. Nearly all U.S. states require employers to have workers’ compensation insurance.

As a business owner, you’re probably wondering how much workers’ compensation costs. Follow along while we explain how workers’ compensation insurance cost is calculated — and why it’s a worthy investment.

What factors influence workers' comp insurance cost?

How much you’ll pay for workers’ comp will depend on the following factors:


Workers’ comp is regulated by the state where your business is based, and each state may have different requirements. States also oversee cost levels.


Different industries have different levels of risk. The higher the risk profile of your business, the more you’ll pay for workers’ comp insurance. All else being equal, for example, a roofing business will generally pay more for workers’ comp than a software company because roofing employees have more physically dangerous jobs than software developers.

Number of employees

This likely won’t come as a surprise, but we’ll mention it anyway – the more employees you need to cover, the more you’ll pay in workers’ compensation insurance costs.


States will calculate how much you’ll pay for workers’ comp insurance based upon your annual payroll. Generally, the higher your employees’ collective salaries, the more you’ll pay. This is because it will cost more to cover a high-salaried employee’s wages than it would for an employee earning less.

Claims history

In the insurance world, the past is used to predict future behavior. If your company has a history of filing workers’ comp claims, then you can expect to pay more than a company with no claims history.

What does workers' comp insurance cover?

Unlike general liability insurance, which covers the risk of bodily harm to third parties, workers’ comp insurance covers your employees for the following types of scenarios.

  • Employee accident: An employee trips over a piece of equipment and breaks her arm. Workers’ comp can cover the medical expenses resulting from the injury as well as a percentage of her lost wages until she is medically cleared to return to work.
  • Employee illness: An employee becomes ill after being exposed to dangerous chemicals while on the job. Workers’ comp may cover his lost wages and the expenses associated with his medical treatment until he can work again.
  • Employee disability: If an employee falls off a ladder and sustains a chronic back injury that prohibits him from doing contracting work again, workers’ comp can cover rehabilitation expenses, both medical and occupational retraining.
  • Repetitive stress injury: You own a restaurant and your sous chef develops a chronic wrist injury related to her repetitive job duties. Workers’ comp can cover the related expenses for medical treatment.
  • Employee death: If an accident results in the death of an employee, state law may provide a nominal amount to help offset the cost of final expenses (e.g., expenses for the funeral). Many states will also provide survivor benefits, which is a percentage of the employee’s former weekly wage paid to the surviving spouse and children for a specified amount of time determined by the state.
  • Employers’ liability: Another important area of coverage covered by your workers’ compensation insurance is your liability. If an employee files a lawsuit against your business for a work-related accident or disease, workers’ comp insurance provides liability coverage for you.

Quick-thinking insurance for your fast-moving company

Most states require companies with employees to purchase workers’ comp to cover employees for work-related illness and injury. At Thimble, we like to keep things simple for fast-moving businesses like yours.

To find out how much workers’ compensation insurance will cost your company, simply click “Get a Quote” or download our free app. We’ll ask you a few questions about your business and help you get covered, so you can get back to work with the protection you need.

Workers’ comp insurance cost FAQs

Is workers’ comp insurance required?

Most of the time, yes. Workers’ comp is required by nearly every state (except Texas) for businesses that have at least one employee.

What is the average cost of workers’ compensation insurance per employee?

That depends on some of the factors specific to your business that we’ve outlined above. To calculate the cost of workers’ compensation insurance per employee, divide your total workers’ comp insurance cost by the number of workers you employ.

Does workers’ comp cover me if I'm the business owner?

It depends on your state’s laws. While some states exclude owners from coverage, others encourage owners to participate. If you are eligible for coverage, it is probably a good idea to purchase a policy (even if you have health insurance) so that you are covered for lost wages as a result of a work-related claim.

Do independent contractors need workers’ comp insurance?

Again, it really depends on your state’s laws. Some states exclude workers’ comp requirements for independent contractors. But even so, some clients may require that you are covered. Furthermore, if you hire employees or subcontractors, your state may require you to purchase workers’ comp for them.

If an employee files a workers’ comp claim, will they be reimbursed for their full salary when they have to miss work?

No, not usually. Typically, benefits are calculated as a percentage of an employee’s weekly wage, subject to minimum and maximum benefits determined.