What workers' comp covers
Workers' compensation pays the medical bills of an employee who is hurt or gets sick because of the job. It also replaces part of the wages they lose while they can't work. State law sets those benefits.
Most policies also include employer's liability. That part responds when someone sues the business over a work injury. It has its own limits, which are shown on the policy.
- Medical care for a work injury or illness.
- Part of the wages lost while the employee recovers.
- Employer's liability for lawsuits tied to a work injury.
Who needs workers' comp
Most states require workers' comp once you have employees. The rules vary by state, including who counts as an employee and whether construction is treated differently. Check your state's rule with the state workers' comp agency before you decide you don't need a policy.
A customer can require it even when the state doesn't. Many GCs and property managers ask every contractor for a workers' comp certificate before work starts.
- Check your state's rule for your number and type of workers.
- Read each contract's insurance section for a workers' comp requirement.
Ohio, Washington, North Dakota and Wyoming: state fund only
In Ohio, Washington, North Dakota and Wyoming, the workers' comp the state requires comes from the state fund. Private carriers and brokers, including us, can't sell that coverage there. If your employees work in one of those states, get it from the state agency.
Who must be covered differs between those states. Wyoming, for example, requires coverage for work it classifies as extrahazardous, so check the agency's rules for your type of work.
State fund coverage generally does not include employer's liability. If a contract in one of those states asks for employer's liability, ask about stop gap coverage.
What drives the price
Workers' comp is priced on payroll. Each type of work has a class code, and each class code has its own rate. Payroll for roofing work costs more to insure than payroll for office work because the work carries more risk.
Once you have enough history, an experience modification adjusts your price up or down. It compares your past claims with what is expected for businesses like yours. Your claims history matters to the insurer even before you have a modification.
Subcontractors matter too. If a sub doesn't carry its own workers' comp, the insurer can count what you paid that sub as your payroll at audit. Collect a certificate of insurance from every sub before they start.
- Payroll for each type of work.
- Class codes that match what each person actually does.
- Your experience modification, if you have one.
- Claims history.
- Certificates of insurance from your subs.
What we need to quote workers' comp
Send us the items below and the state or states where you work. Estimates are fine if you tell us they are estimates. Workers' comp policies are usually audited after the term, so the final premium follows your actual payroll.
We can't promise a price before we see your details. We will tell you what we found and what each quote assumed.
- Annual payroll, split by the type of work each person does.
- Number of full-time and part-time employees.
- Years in business.
- Claims in the past few years, or a note that there were none.
- Whether your subcontractors carry their own workers' comp.
Sole proprietors with no employees
If you work alone with no employees, you may be able to exclude yourself from coverage. Whether you can, and how, depends on your state and how your business is set up.
A GC may still ask for a workers' comp certificate before you start, even if the law doesn't require you to have a policy. Ask us about your options before you sign the contract.
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Use this guide for planning. Confirm requirements and current fees with the agencies serving your address. Coverage depends on the policy and insurer; this guide does not confirm that a particular operation is eligible.