Sample Workers Comp Insurance Rates Across Different Industries

Mar 2, 2020Blog0 comments

Workers’ comp insurance rates are the prices of insurance compensation policies that protect the employer as well as the employee when there’s a work-related illness or injury that occurs. One part of this type of insurance provides workers that have gotten ill, are injured or killed because of work-related events with financial protection. 

The other side of it protects concentrates on employer protection ensuring that employees don’t bring suits against their employers seeking medical expenses if they’ve got a workers’ compensation policy working for them. This is what’s commonly known as an exclusive remedy.

Because worker comp insurance is normally regulated on a state level, policy costs will depend on the location of the employees. Companies and businesses that have got a lot of employees on their payroll, as well as more risks, will often have to pay higher rates when it comes to workers’ comp. 

Let’s take a look at the workers’ comp you can expect to pay across the nation.

Median Premiums

For this type of insurance, you’re most likely going to have to pay a $550 per/annum median premium, or slightly below 50 dollars per month.

Most insurance companies typically list down, as averages, median costs which is inclusive of extremes such as high-risk construction business operations that pay much higher rates for workers’ comp.

Workers’ Comp Claim’s Average Cost

The average cost you’d expect to pay on a claim under a workers’ comp policy will be around forty thousand dollars. This is what the National Safety Council has reported. Workers’ comp premiums are likely what’s going to suit your business best, especially if it’s small and growing. Small business owners usually buy these even when the law doesn’t require them to.

A large number of small business owners pay under 400 dollars per/annum for this kind of insurance. In fact, not only do they averagely pay 400 dollars per year and less, 50% never surpass 800 dollars per year. 

High-Risk Businesses Have To Pay Higher Rates

Around 20 percent of the worker fatalities in the private sector occurs in the world of construction. The hazardous nature of this said industry will often result in the attraction of higher insurance premiums. Likewise, the accounting and financing industry has lower premiums because of the minimal risks involved during work time. 

Certain Industries Will Have To Pay Higher Workers’ Comps

Businesses that find themselves falling under the construction and contracting industry can ay over $3,000 in premiums. While the finance and accounting genre is more likely to pay less than $400.

Here are some more examples of what you can expect from your industry’s insurance rates:

  • Landscaping: Up to $2,700
  • Cleaning Services: Up to $1,800
  • Food and Beverage: Up to $1,300
  • Healthcare: Up to $700
  • Consulting: Up to $500
  • Marketing: Up to $400
  • Information Tech: Up to $400

While this is one of the various factors taken into account for your final premium cost, it’s one that weighs the heaviest. 

The Difference in Workers’ Comp Insurance Rates

Businesses that have huge employee rosters will pay for higher-cost workers’ compensation. There is a direct correlation between how much is being paid out for workers’ comp by the business and the number of employees the business has. 

An example of low workers’ comp rates versus the higher-end rates looks something like this:

Tax Preparation Service- Three employees with $140,000 total annual payroll:

Class code: 8810

Rate per 100 dollars: $0.12

Rate for annual payroll: ($140,000)- $168

Admin Fee: $250

Employer’s Total Cost: $418

Painting Contractor: Three employees with $140,000 total annual payroll:

Class code: 5474

Rate per 100 dollars: $8.99

Rate for annual payroll: ($140,000)- $12,586

Admin Fee: $250

Employer’s Total Cost: $12,836

The policy examples highlighted above are based on the companies or businesses lacking any prior workers’ compensation insurance claims against them. The primary factors that’ll affect workers’ comp costs include:

  • The state in which one works in
  • The industry the company participates in
  • The business’ annual payroll
  • The business’ claims history

Legal Considerations When It Comes To Workers’ Comp Insurance Rates

Depending on the state your business is situated in, the workers’ comp requirements can sometimes vary. The states that have been deemed NCCI state similar experience ratings and regulations, however, they still end up using their own insurance rate structures.

NCCI, which is the ‘National Council on Compensation Insurance’, is a baby of the insurance industry that was created with the goal of standardizing the details involved when calculating workers’ comp insurance premiums. Some of the obvious differences between states include: 

  • States like Georgia, where they allow single-person companies to buy workers’ comp policies but excludes the owner from coverage. This is what’s known as a “Ghost” insurance policy and it’s used to meet the workers’ comp requirements of general contractors and business owners that hire subcontractors;
  • Some states, like Florida, don’t need workers’ comp insurance unless there are 4 or more workers in a non-construction company. They’ll allow you to remove the company officers from your insurance policy.
  • In Colorado, all business owners must pay for workers’ compensation if they’ve hired one or more employees. However, these requirements have 8 unusual exceptions. For one, any individual that volunteers their services or time as a ski-area operator.
  • In the State of New Jersey, employers can still be held liable by their employees for significant medical scenarios if their workers can prove that they are the ones that caused the illness or injury either through recklessness or intentionally.
  • A lot of states, such as California and the like, require every business to pay for workers’ compensation insurance. In fact, they even have serious penalties for those that are found, by the California Workers’ Compensation Department, to have a business that’s not been actively insured.
  • Most states all across the country typically treat full-time. The same goes for part-time employees the same, so you might find that they sometimes both have similar compensation packages.  

How To Buy Your Insurance

Most states that have flexible workers’ comp insurance rates will allow you to buy this type of insurance package from private insurers. The top insurers will allow you to compare workers’ comp quotations from the top carriers in the United States. This information can help you decide what’ll work best for both you and your business.

Also, some states have their own unique insurance funds that provide business owners with workers. They also provide comp insurance packages, which can prove very convenient sometimes.

In fact, in Wyoming, Washington, Ohio, and Dakota, business owners are required to buy their insurance policies from the state fund, which is known as the monopolistic fund.   

If you think you have a compensation claim on your hands and are looking for help, contact us today for more information. 

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