How much does Workers' Compensation Insurance cost? Average premiums by business size, industry, and state — plus the key factors that drive your rate up or do…
Comprehensive FAQ, cost guide, and real claims examples for workers' compensation insurance — required coverage that pays medical expenses and lost wages for employees injured on the job.
Workers' compensation insurance provides medical benefits, wage replacement, and rehabilitation services to employees injured on the job, regardless of fault. It also shields employers from lawsuits by injured workers (exclusive remedy doctrine). Required in 49 states for employers with at least one employee (Texas being the exception where it is optional). Premiums are calculated as a rate per $100 of payroll and vary significantly by job classification.
| Business Size | Annual Revenue | Typical Premium | Notes |
|---|---|---|---|
| Micro Business (1–4 employees) | Under $500K payroll | $500–$5,000/yr | Highly variable by class code. Office: $200–$800. Construction: $3,000–$15,000. |
| Small Business (5–24 employees) | $500K–$2M payroll | $2,000–$25,000/yr | EMR begins to apply once you've been in business 3+ years. |
| Mid-Size (25–100 employees) | $2M–$8M payroll | $15,000–$100,000/yr | At this level, return-to-work programs and safety investments have significant ROI. |
| Large Employer (100+ employees) | Over $8M payroll | $75,000–$500,000+/yr | Large-deductible and captive programs become cost-effective. Group rating available in many states. |