According to the Insurance Information Institute, insurance companies write over $40 billion in workers' compensation insurance benefits every year. This number has been rising steadily, according to Insurance Journal, which reports that workers comp claims frequency has continued to rise.
However, there is a silver lining in these reports, and it's that worker’s comp claims are becoming more sustainable. This is due in large part to training initiatives that drastically reduce the chances of workplace injuries and their consequences.
The majority of workers comp claims result from first-time workplace incidents. As people get more training, workers comp insurance costs should also start to fall despite the increased frequency.
Understanding workers' compensation insurance for small business, begins with understanding how does it work, what it covers, and other critical components regarding the policy. In this article, you will discover the answers to common questions about workers’ compensation insurance, which include:
What is workers compensation insurance?
How does workers compensation insurance work?
Is workers compensation insurance compulsory?
How long does workers comp last?
How much is workers compensation insurance?
The best workers compensation insurance companies
Workers’ comp insurance is the insurance policy that helps workers receive benefits for lost payments wages and medical bills due to workplace injury or illnesses. The medical benefits and the wage amount covered vary from state to state.
Worker’s compensation started after a law was passed in 1911 called The Worker’s Compensation Act. Before that time, all employee compensation disputes had to be resolved in courts by tort judgment. The worker had an increased burden to prove the employer was negligent, resulting in rarely favorable judgments for the worker. This law was passed in reaction to horrible working conditions and deaths that were occurring in high-risk labor jobs.
Today, workers’ comp is considered social insurance because it involves a contract between the employer and employee where they work together to get benefits from an insurance provider. It also has this classification because it is one of the most universally required insurance types for businesses by law from the government.
When deciding to get workers compensation insurance, you must pay attention to the legal requirements and your business's needs. The US Department of Labor is responsible for setting the standards for disability compensation programs and instituting programs to reduce work-related incidents of injuries and illnesses.
Workers' compensation insurance works by following a step-by-step process. The employer, the employee, the insurance company, and possibly an adjudicator will be involved in the course of the employee receiving benefits. This process is described below:
|Employee reports an injury||The employee has the responsibility of taking the first step of reporting an injury to their employer within 30 days of the incident date|
|Employer and employee file a claim||The employer is responsible for giving the employee a compensation form within one business day. They both fill out the necessary parts of the form and send it to the insurance company|
|The insurance company responds to the claim||The insurance company will determine whether to authorize payment for the claim|
|Employee files an adjudication claim if necessary||In the case that an employee disagrees with the decision, they can file a claim to appeal it. An adjudicator is appointed to make a further determination|
Practically every business must have workers compensation coverage by US law, no matter their size. Even if you only have one employee, you must have general liability and workers comp insurance for small business.
Certain businesses are excluded from having to buy workers compensation insurance. The reason for their exemption is outlined below:
|Exempt Party||Reason for exemption|
|Texas businesses||Texas doesn’t require workers comp insurance from businesses|
|Agricultural workers||They may opt-out|
|Government workers||Government insurance is already adequate coverage|
|Independent contractors||Are not typically classified as employees|
|Sole proprietors/LLCs||Owners are exempt from the requirement, and if they don’t have any employees, they may not be required to provide workers’ comp|
Workers compensation coverage usually applies on the following benefits that an employee must receive upon sustaining a work-related injury or disease:
Hospitalization-Workers compensation insurance can be claimed to cover the cost of an employee’s stay on the hospital and the necessary medical procedures required
Medication-Employees covered by workers compensation insurance can file a claim to cover the cost of medication for the continued healing of a work-related injury or disease
Lost wages-Workers compensation insurance can cover a percentage of a covered employee’s lost wages. The specific amount is determined by the provisions of the workers comp law of the state
Funeral expenses and allowance to dependents-Death and cash allowance to dependents is the final workers compensation insurance coverage. The policy can be used to cover the cost of a covered employee’s burial. Dependents will also receive cash based on the covered employee’s average weekly salary
The actual amount of benefits an employee receives from workers comp insurance for small business will vary depending on the type of injury or disease sustained. Workers comp laws in the US typically categorize this as a:
Temporary partial disability-These are injuries or illnesses that can be healed but will impede an employee to perform regular tasks temporarily. For example, first or second-degree burns, muscle strain, and nerve damage
Temporary total disability-These are injuries or illnesses that can be healed but will force an employee to get off work for a definite period of time. A good example is temporary vision loss due to migraines
Permanent partial disability-These are injuries or illnesses that an employee can recover from but will leave a permanent impairment in bodily functions. The employee can return to work but not as effective as he or she used to before
Permanent total disability-These are injuries or illnesses that will force an employee to quit work and will leave an impairment that will affect one or more bodily functions
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What if you’re a self-employed professional? Is it possible to cover yourself with workers compensation insurance?
You can purchase workers compensation insurance for self employed individuals. All you have to do is to classify yourself as a sole proprietor with no employees and ask the insurance company if your name can be added as an insured in their workers comp insurance policy.
Self employed workers comp insurance works the same way as the workers comp policy you purchase for employees. It will cover the cost of your hospitalization, medical bills, lost income, and burial.
Below you can see how the length of worker’s comp can vary by state:
|State||How long an employee can be on workers comp?|
|Georgia||Up to 400 weeks|
|Alabama||Up to 300 weeks|
|Alaska||Up to 104 weeks|
|Arkansas||Up to 450 weeks|
|Connecticut||Up to 520 weeks|
|Delaware||Up to 300 weeks|
|Florida||Up to 260 weeks|
|Illinois||Up to 162 weeks|
|Indiana||Up to 500 weeks|
|Kentucky||Up to 425 weeks|
|Louisiana||Up to 520 weeks|
|Maine||Up to 520 weeks|
|Maryland||Up to 156 weeks|
|Mississippi||Up to 450 weeks|
|Montana||Up to 260 weeks|
|Nebraska||Up to 300 weeks|
|Nevada||Up to 156 weeks|
|New Hampshire||Up to 262 weeks|
|New Jersey||400-600 weeks|
|New Mexico||Up to 700 weeks|
|New York||225-525 weeks|
|North Carolina||Up to 500 weeks|
|North Dakota||Up to 1,500 weeks|
|Ohio||Up to 520 weeks|
|Pennsylvania||Up to 500 weeks|
|Rhode Island||312-500 weeks|
|South Carolina||Up to 500 weeks|
|South Dakota||Up to 400 weeks|
|Tennessee||Up to 450 weeks|
|Utah||Up to 312 weeks|
|Vermont||Up to 104 weeks|
|Virginia||Up to 500 weeks|
|West Virginia||104-336 weeks|
The average workers compensation insurance cost is $101 per month or $1,212 per year, depending on your employee payroll, location, and claims history. Depending on which industry your business is in, this can have a smaller or more significant effect on the final premium price as well. The average cost of workers comp insurance of the best companies is broken down below:
|Cost per Month||Cost per Year||Best for|
|NEXT||$12||$144||Best overall; Fastest workers compensation insurance|
|The Hartford||$13||$156||Workers compensation insurance policy with preferred medical provider networks and pharmacies|
|Coverwallet||$30||$360||Comparing workers compensation insurance quotes online|
|Tivly||$85||$1,020||Comparing workers compensation insurance quotes over the phone|
|Thimble||$35||$420||Getting coverage quickly|
|Hiscox||$23||$276||Workers compensation insurance for small businesses|
Compare options to get the best workers comp coverage. Click the “Get Quotes” button on this page to compare workers comp insurance quote in one sweep.
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If you are looking for cheap workers comp insurance, it is important to shop around. Below is a list of the top companies with an excellent workmen compensation policy. They offer different advantages depending on your needs and your employee’s needs. Proceed below to know their pros, cons, and average cost:
Workers compensation insurance can be bundled with other business insurance policies
Enjoy a 10% policy bundle discount
Automatically has an employer’s liability add-on
Couldn’t find any
NEXT provides excellent workers compensation insurance for self employed professionals and small businesses thanks to its low price and bundle discounts to make finding other types of business insurance a breeze.
Best for: Best overall; Fastest workers compensation insurance
Average cost: $12 per month
Our rating: 10/10
File and track your policy instantly online
Simple to incorporate add-ons
Workers' health program ensures your employees like the plan too
Number 2 workers comp insurance underwriter in 2021
Need to talk to an agent before selecting a policy
The Hartford stands out from the pack with its nursing back to a health program that helps coordinate every aspect of your employee’s recovery. They are a good option for healthcare convenience thanks to having access to more than 65,000 pharmacies that allow your employees to get the treatments they need without out-of-pocket costs.
Best for: Workers compensation insurance policy with preferred medical provider networks and pharmacies
Average cost: $13 per month
Our rating: 10/10
Compare workers compensation insurance quotes online
Cancel your coverage anytime
Choose workers comp quotes from a wide variety of underwriters
Not an insurance company but an insurance broker
Another standout workers’ comp insurance company is CoverWallet. They boast a fantastic payment program where you pay in set installments instead of large lump sums. This means that your costs are spread out throughout the year instead of having upfront costs.
Best for: Comparing workers compensation insurance quotes online
Average cost: $19 per month
Our rating: 10/10
Company profiles make finding the right partner easy
Extensive experience with finding good policies
Call process to help you select the right policy
No mobile app
Tivly is another popular marketplace for wc insurance. They offer a place for business owners to find a workers compensation insurance quote while pairing you with a carrier that has the necessary experience to deliver the best policy. Call a Tivly representative now to compare quotes over the phone.
Best for: Comparing workers compensation insurance quotes over the phone
Average cost: $85 per month
Our rating: 10/10
Unmatched policy choices
Coverage is quick to set up
Online-only support for their customers
If you are in a hurry to get your coverage up and running, then Thimble might be a good choice for you. You can choose between workers comp insurance policies made for businesses, independent contractors and self-employed professionals. Another great feature is the speed you can get through the quote and purchase process.
Best for: Getting coverage quickly
Average cost: $35 per month
Our rating: 10/10
Variety of policy options
Discounts when buying multiple products
Caters to small business needs
Not available in every state
Hiscox offers customers a personalized experience that allows them to choose from various options for their workers’ compensation insurance. Their workers' comp insurance for small businesses will typically be sold through their partners.
Best for: Workers compensation insurance for small businesses
Average cost: $23 per month
Our rating: 10/10
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
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As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!