Workers' Compensation Insurance
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Cheap workers' compensation insurance

There are several ways your small business can save money on workers' compensation insurance, including correctly classifying your employees, managing workplace risks, and more. Learn how you can pay less for workers’ comp and still protect your business.

How can I find cheap workers' comp insurance?

Workers’ compensation insurance, a policy required in most states if you have one or more employees, is an essential piece of coverage to effectively protect you, your employees, and your business. Workers’ comp covers medical expenses and lost wages for employees who are injured on the job.

There are five ways to help you get affordable workers' compensation coverage:

  • Shop around. Compare workers’ comp quotes from different insurers.
  • Correctly classify employees. Misclassifying your workers can lead to paying more in the long run.
  • Pay-as-you-go plans. Get flexible premiums that change according to how many employees you have in each payroll cycle.
  • Low-premium plans. Ghost policies and minimum premium policies offer coverage at low prices for sole proprietors.
  • Manage workplace risks. Cultivate workplace safety to avoid injuries and keep your premium low.

When purchasing workers’ compensation, there are several factors to keep in mind: state requirements, if your state leverages a state insurance fund, safety and risk factors, and the number of employees who work for your business.

Get affordable workers’ compensation insurance today

View video transcript.
You know you need insurance for your small business, but where to start? And how can you keep costs down? Insureon is here for you. You can get customized quotes from top carriers. Most small businesses start with a general liability policy. You can combine property coverage with your liability insurance at a discount of $57 per month. Maintaining a safe work environment can help you manage risk and lower your insurance costs too. Get affordable insurance from the best carriers. Start your application now! Insureon. Protection is peace of mind.

1. Shop around and compare workers’ comp quotes

Different insurance providers offer different prices for workers’ compensation insurance, which is why it’s worth shopping around.

You could reach out directly to various insurance companies for quotes on their workers’ comp policies. Thankfully, there’s an easier method.

Instead, leverage an online insurance marketplace like Insureon or insurance agent or broker to get workers’ compensation quotes from several insurance carriers. Just make sure the agency or brokerage represents multiple companies since some work with one exclusively.

They’ll navigate your industry to find an affordable workers’ comp policy to meet all your business’s needs. Plus, they will probably know your individual state’s workers’ compensation laws.

How can a licensed Insureon agent help you

Insureon can help you save money on your policy. You’ll get several workers’ compensation insurance quotes from top-rated providers by filling out our easy online application. Plus, a licensed insurance agent will walk you through your options and help you find the right insurance policy to fit your risks and budget.

For example, choosing lower policy limits can help you save money on your policy. An experienced agent can help you set appropriate limits, recommend endorsements that match your risks, and let you know which add-ons you can safely skip.

How much does workers’ compensation insurance cost?

A small business owner calculating their workers' comp insurance payments

Workers’ comp insurance costs about $45 per month. This is based on the average cost of workers' compensation insurance for Insureon customers. 23% of Insureon's small business customers pay less than $30 per month for this policy.

Your workers' comp cost is calculated based on a few factors, including:

  • Payroll
  • Location
  • Number of employees
  • Industry and risk factors
  • Coverage limits
  • Claims history

2. Ensure your employees are classified correctly

The National Council on Compensation Insurance (NCCI) is an organization that gathers data and helps establish workers’ comp insurance rates. The council utilizes more than 700 workers’ compensation class codes to denote the amount of risk and hazard each job might entail, assign a value based on these conditions, and help insurance providers determine the cost of workers’ comp policies.

It’s important for business owners to audit their workers’ comp classifications as new employees are hired, current employees are promoted, business duties are reassigned, or employees leave the company.

Whether intentional or accidental, misclassifying one of your workers could lead to overpaying for your insurance policy, or underpaying. That could lead to hefty fines and penalties, and an outstanding balance owed to the insurance provider after the premium recalculation.

By ensuring each worker is properly classified as either a contractor or an employee (full- or part-time), and listed under the appropriate class code, you can save money and avoid potential legal action.

3. Choose a pay-as-you-go workers’ compensation plan

Pay-as-you-go workers’ compensation insurance offers flexible premiums that change throughout the year. These premiums rely on any changes to your number of employees, as well as your payroll data over the course of one year.

This is a great option for small business owners looking to pay less for workers’ comp, since the initial down payment is likely to be more affordable than a traditional plan.

What's more, it’ll reduce the guesswork in estimating your insurance costs. Every time you run payroll, you’ll know exactly how it affects your insurance rates.

4. See if you qualify for a lower premium policy

There are two types of lower premium policies: a minimum premium workers’ comp policy and a ghost policy. Both fulfill the obligation to carry a workers’ compensation policy. However, a ghost policy provides zero workers’ comp coverage, and the availability of these policies is dependent on the state your business operates in.

Minimum premium workers' comp policy

A minimum premium policy is the lowest premium an insurance company will sell a policy for, regardless of your payroll or amount of coverage.

For small business owners, this could mean your premiums would be the same if you expanded from one to two employees.

Workers' compensation ghost policy

A ghost policy is ideal for self-employed business owners or sole proprietors with no employees who need to show proof of workers’ compensation insurance coverage to either win a new contract or satisfy a state requirement.

This type of policy covers no one and provides no healthcare benefits. It only offers a certificate of insurance (COI).

Find affordable workers' comp insurance quotes

5. Manage your risks for affordable workers' compensation insurance

In most cases, a safer workplace equates to fewer workers’ compensation claims against your business, as well as a lower insurance premium.

There are several ways you can promote workplace safety and minimize workplace injuries: 

  • Establish safety procedures and training
  • Provide the proper gear and require adequate footwear
  • Post hazard signs and labels
  • Maintain tools and equipment and a clean workspace
  • Consider ergonomic furniture and equipment

Businesses with good safety records will see this reflected in a low Experience Modification Rating (EMR Rating), which translates into lower rates for their workers’ compensation coverage. An EMR is one way for insurance carriers to adjust their premiums, based on the expected losses from workers’ comp claims for each company they insure.

The average EMR is 1.0, which means a business is no more or less risky than similar businesses in their profession. A higher rating would mean a riskier business and higher premium, while a lower rating would mean a less risky business and lower premium.

How do state laws impact workers' compensation insurance requirements?

Since workers’ compensation is regulated on the state level, each state has its own requirements and penalties. Workers' compensation insurance is required in nearly every state, and some states require employers to buy workers’ compensation insurance through a state insurance fund.

These states require all workers’ comp policies be purchased through a state fund:

However, there are a few exemptions. In some cases, specific types of workers and business structures, such as independent contractors and limited liability companies (LLCs), are exempt from carrying workers’ comp insurance.

Also, South Dakota and Texas are different than most other states because workers’ compensation insurance isn’t generally mandated. Employers without this coverage usually must notify the state and their employees.

Even though your business might be able to save money by not buying workers’ compensation, it’s usually a good investment. Private health insurance won’t cover any work-related injuries or illnesses, which could leave you on the hook for expensive medical bills.

Most policies include employer’s liability insurance, which protects your business against lawsuits from injured workers.

What doesn't workers' comp insurance cover?

While workers' compensation insurance covers major employee risks including work-related injuries and illnesses, disability benefits, and sometimes death benefits, it doesn’t provide complete protection.

Other insurance products to consider include:

General liability insurance: A general liability policy covers common business risks like customer injuries, damage to a customer’s property, and advertising injuries.

Commercial auto insurance: This policy covers vehicles owned by your business and is required in nearly every state. It typically pays for auto accidents and damages related to theft, weather, and vandalism.

Professional liability insurance / Errors and omissions insurance (E&O): If you provide professional advice or services to clients, you likely need this policy. Professional liability and E&O can be affordable while protecting your business if you’re accused of a mistake, oversight, or professional negligence.

Business owner’s policy (BOP): A BOP bundles general liability insurance with commercial property insurance. It generally costs less than buying these two policies separately.

How to get cheap workers' compensation insurance with Insureon

Complete Insureon’s easy online application today to find affordable workers’ compensation insurance quotes from top-rated U.S. companies. Once you find the right small business insurance to meet your needs, you can begin coverage in less than 24 hours. 

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