Workers Compensation Insurance for Commercial Contractors: Cost & Quotes

Stepping onto the construction site means juggling both ambition and responsibility. Commercial contracting is a dynamic industry, encompassing a wide range of services from construction and renovation to maintenance and landscaping. Amidst the hustle and bustle of these operations, the safety and well-being of workers stand as paramount concerns. Workers compensation insurance for commercial contractors emerges as a crucial shield, safeguarding both employers and employees. Read on to learn about the detailed landscape of this insurance.

What is Workers Compensation Insurance for Commercial Contractors?

When it comes to the safety and security of both employers and employees in the realm of commercial contracting, workers compensation insurance for commercial contractors takes center stage. This specialized policy serves as a comprehensive shield, addressing the unique challenges faced by these professionals. It offers a safety net against unforeseen accidents and illnesses that can disrupt operations and strain finances.

From construction to maintenance, the tasks undertaken by commercial contractors expose them to diverse risks, making this insurance indispensable. Moreover, the concept of workers comp is embedded in the notion of responsibility. In a field as diverse and demanding as commercial contracting, securing the right insurance coverage is not just a legal obligation but a strategic move.

When Do You Need to Get Workers Compensation Insurance for Commercial Contractors?

Apprehending when to obtain workers compensation insurance for commercial contractors is necessary for both business owners and employees. This insurance serves as a safety net, offering financial protection in the event of work-related injuries or illnesses. To determine when a business needs this coverage, it's essential to delve into the provisions of workers compensation laws.

Workers comp law provisions in each state outline the circumstances under which businesses are required to provide workers compensation insurance for their employees. These provisions typically mandate coverage when a business employs a certain number of workers. The specific threshold varies from state to state, making it important to consult local regulations.Commercial contractors workers comp insurance isn't just a legal requirement; it's a strategic investment. Even in states where coverage might not be mandated for a specific number of employees, obtaining this insurance is a prudent choice.


What Government Agency Oversees Workers Compensation for Commercial Contractors?

The oversight of workers compensation falls under the purview of a crucial government agency known as the Workers compensation commission in the Department of Labor. This entity is tasked with ensuring that employers adhere to legal obligations related to providing workers compensation for commercial contractors employees, safeguarding the interests of both workers and businesses.

Additionally, in some areas, the Occupational Safety and Health Administration (OSHA) collaborates with workers compensation agencies to enhance workplace safety. OSHA establishes safety standards, conducts inspections, and provides training to prevent workplace accidents in the commercial contracting industry. This cooperative approach ensures that both the prevention of accidents and the provision of compensation are addressed comprehensively. Local Labor Departments may also contribute to the oversight of workers compensation for commercial contractors. They work to uphold labor laws, including those related to compensation and benefits.

Which Businesses Are Exempt from Getting Workers Compensation Insurance for Commercial Contractors?

While commercial contractors workers compensation insurance is a vital safety net for both employees and businesses, there are instances where certain businesses may be exempt from obtaining this coverage. It's crucial to consult the specific guidelines provided by the state's workers compensation authority to understand which businesses qualify for exemptions and the criteria that apply.

Exemptions from workers comp often depend on the size of the business, the type of work conducted, and the nature of the workforce. Small businesses with a limited number of employees, particularly those employing only the owner or immediate family members, might be eligible for exemptions in some states. These exemptions acknowledge the unique dynamics of family-operated businesses and the close relationships within them.

Some states also offer exemptions for certain industries or occupations where the risks of workplace injuries are relatively low. For instance, businesses engaged in clerical work, professional services, or administrative tasks might be exempt due to the reduced likelihood of physical accidents. However, it's essential to note that the eligibility for these exemptions varies from state to state.

In some jurisdictions, businesses with an extremely small workforce, typically consisting of a handful of employees, might not be required to carry workers comp for commercial contractors. This recognizes that the financial burden of insurance premiums could be disproportionate for such businesses. However, the definition of "small workforce" and the associated exemptions can differ between states.

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How Much Money Does Workers Compensation Insurance Give for Commercial Contractors?

The extent of monetary benefits offered by workers compensation insurance for commercial contractors varies depending on factors such as the injury's type, severity, and jurisdictional regulations. Here, we outline the specific financial support provided for different disability types under commercial contractor workers' compensation insurance:

  • Temporary Partial Disability Benefits: These benefits cater to employees who experience temporary incapacity to perform their regular job duties but retain limited capacity for reduced work activities. Compensation often constitutes a percentage of the difference between the employee's pre-injury wages and their current earning potential. It's important to note that the calculation method differs among states.

  • Temporary Total Disability Benefits: Employees entirely unable to work due to a work-related injury or illness can access temporary total disability benefits. These benefits typically encompass around 66⅔% of the employee's pre-injury wages, designed to cover a substantial portion of lost wages during the recovery period. For instance, if an employee's pre-injury wages were $1,200 weekly, their temporary total disability benefits may amount to approximately $800 per week.

  • Permanent Partial Disability Benefits: In cases of permanent impairment allowing partial work capacity, employees may qualify for permanent partial disability benefits. The specific compensation amount varies based on the impairment's nature and extent. Certain states employ a predetermined schedule to determine compensation for specific injuries. For example, if a state designates $200 per percentage point of impairment and an employee has a 10% impairment, they could receive $2,000 in permanent partial disability benefits.

  • Permanent Total Disability Benefits: Employees sustaining severe injuries or illnesses resulting in complete inability to work may be eligible for permanent total disability benefits. Similar to temporary total disability benefits, compensation is often a percentage of the employee's pre-injury wages. Eligibility criteria for permanent total disability benefits are stringent, demanding truly incapacitating injuries or illnesses. For instance, if an employee's pre-injury wages were $1,500 weekly, their permanent total disability benefits could be capped at $1,000 per week.

How Long Will an Employee Wait Before Receiving Benefits?

When it comes to commercial contractor workers comp insurance benefits, employees may understandably be concerned about how soon they can expect to receive financial support after a work-related injury or illness. Understanding the waiting period is crucial for both employees and employers, as it sets expectations and helps manage the transition during the recovery phase.

The waiting period, often referred to as the waiting period for workers compensation benefits, is the initial period that an injured employee must wait before becoming eligible to receive benefits. This period serves as a buffer to ensure that only legitimate claims are processed and to allow time for the injury's extent to be assessed accurately.

The length of the waiting period can vary depending on the jurisdiction and the specific circumstances of the injury. In many states, there is an initial waiting period of a few days before benefits kick in. This period is normally between 3 to 7 days. If the injury results in the employee's absence from work for a longer duration, the benefits may be retroactively applied to cover the waiting period as well.

Penalties for Not Getting Workers Compensation for Commercial Contractors

Specific penalties for non-compliance can vary based on the jurisdiction and the state's workers compensation laws. Below, we provide insights into potential penalties that commercial contractors could face for neglecting to obtain this coverage.

Monetary Penalties

Many states impose significant monetary penalties on businesses that do not provide the required commercial contractor workers comp insurance coverage for their employees. These penalties can accumulate daily, and the amount often depends on factors such as the number of employees and the duration of non-compliance. For instance, businesses might incur fines ranging from hundreds to thousands of dollars per day for each day they operate without adequate coverage.

Criminal Penalties

In some jurisdictions, non-compliance with workers compensation laws can result in criminal charges. This can lead to convictions, fines, or even imprisonment for business owners who deliberately evade providing the required coverage. Criminal penalties are often more severe for repeat offenders or cases involving gross negligence.

Some states may revoke certain legal protections or defenses that businesses would normally have in cases of workplace injuries. This means that if an employee is injured due to the business's negligence, the business may be liable for full compensation without the usual legal limitations on liability.

Cease and Desist Orders

Regulatory authorities may issue cease and desist orders, effectively prohibiting a business from conducting operations until it complies with the workers compensation requirements. This can have serious implications for the business's operations, reputation, and financial stability.

Personal Liability

In some cases, business owners themselves may become personally liable for the medical expenses and damages incurred by injured employees due to the lack of coverage. This can lead to severe financial strain and legal consequences for business owners.

Workers Compensation Insurance Cost for Commercial Contractors

The typical expenditure for commercial contractors workers compensation insurance stands at an average of $154 per month, equivalent to $1,848 annually. The following breakdown illustrates the usual workers comp rate for commercial contractors provided by prominent companies.

Cost per MonthCost per YearBest for
Hiscox$30$360Established commercial contractors seeking specialized workers comp insurance and a wide range of options to protect their business
Thimble$40$480Commercial contractors with project-based work patterns seeking flexible and on-demand workers compensation coverage
NEXT$50$600Best overall; Fastest workers compensation insurance
CoverWallet$65$780Comparing workers compensation insurance quotes online
Tivly$85$1,020Comparing workers compensation insurance quotes over the phone
The Hartford$110$1,320Established commercial contracting businesses seeking comprehensive workers compensation coverage with an emphasis on risk management

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Other Business Insurance Policies for Contractors and Construction Companies to Consider

While workers comp for commercial contractors coverage is a fundamental aspect of protecting your employees and business, it's important to recognize its limitations. This coverage may shield your employees and offer partial protection for your business, but it does not extend to other crucial areas such as property damage, client injuries, or company vehicles. For small business owners and contractors in the construction industry, it's essential to explore additional insurance policies that address these aspects comprehensively.

General Liability Insurance

This policy protects against third-party claims for bodily injury, property damage, and personal injury. It's a cornerstone of business insurance, covering legal expenses arising from accidents on your business premises, property damage caused by your operations, and more. It offers a broader shield beyond workers compensation coverage, ensuring financial security against a range of potential liabilities.

Business Owner's Policy

A business owner's policy (BOP) combines general liability insurance and property insurance into a single package. It not only covers third-party claims but also safeguards your business property and physical assets. BOPs are good for small businesses and contractors, offering comprehensive protection against various risks in one convenient policy.

Commercial Auto Insurance

If your construction company utilizes vehicles for business operations, commercial auto insurance is crucial. It provides coverage for vehicles used for work purposes, protecting against accidents, property damage, and liability claims arising from vehicle-related incidents.

Contractor's Tools and Equipment Insurance

This specialized policy ensures that your tools, equipment, and machinery are covered against theft, damage, or loss. As a contractor, your tools are your livelihood, and this insurance safeguards your essential assets from unforeseen events.

Professional Liability Insurance

Also known as errors and omissions insurance, professional liability insurance is vital for contractors offering design, advice, or professional services. It covers claims arising from errors, mistakes, or negligence in your professional work.

Surety Bonds

Surety bonds are essential for contractors involved in projects that require contractual guarantees. They provide financial security to project owners by ensuring that contracted work is completed as agreed. If the contractor fails to fulfill their obligations, the bond covers the financial losses incurred.

Builder's Risk Insurance

For construction projects, builder's risk insurance offers protection against damage or loss to the project under construction. It covers materials, supplies, and even the structure itself, shielding contractors from financial setbacks caused by unforeseen events.

Compare Cheap Workers Compensation Insurance for Commercial Contractors Cost & Quotes

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Best Commercial Contractors Workers Compensation Insurance Companies

As a dedicated commercial contractor, ensuring the safety of your team and the protection of your business is paramount. Yet, the quest for the ideal workers comp insurance for commercial contractor partners can feel like a daunting odyssey. Below are the top choices that stand ready to safeguard your team and business.

NEXT Insurance


  • Offers a user-friendly online platform for easy policy management and purchasing

  • Their policies are tailored to various industries, including commercial contractors, providing specialized coverage

  • Fast and hassle-free claims process through their digital platform

  • Best overall

  • Fastest workers compensation insurance

  • Great customer service and reputation

  • Outstanding value for money

  • Get a 10% discount if you buy two or more policies


  • Coudln’t find any

NEXT stands out for its innovative approach to insurance, particularly for small businesses and commercial contractors. This insurer is well-suited for businesses looking for flexibility in coverage options and a streamlined claims process. They offer comprehensive workers compensation coverage tailored to the unique risks of commercial contracting work, ensuring that employees are protected against work-related injuries and illnesses.

Best for: Best overall; Fastest workers compensation insurance

Average cost: $50 per month

Our rating: 10/10

The Hartford


  • Hartford is a well-established and reputable insurance company with decades of experience

  • They offer a range of insurance solutions, including workers compensation, for various industries

  • A strong focus on risk management and safety programs to prevent workplace injuries


  • No coverage in all states

With a history dating back over two centuries, The Hartford is a reliable choice for commercial contractors seeking workers compensation coverage. Their deep industry knowledge and commitment to risk management make them a valuable partner for businesses looking to prioritize workplace safety. Hartford's workers compensation policies are designed to provide financial protection for employees while helping businesses mitigate risks and maintain compliance with local regulations.

Best for: Established commercial contracting businesses seeking comprehensive workers compensation coverage with an emphasis on risk management

Average cost: $110 per month

Our rating: 9/10



  • CoverWallet offers a simplified application process, making it easy for commercial contractors to get quotes and purchase coverage.

  • Their platform provides access to multiple insurance carriers, allowing you to compare options.

  • The ability to bundle workers compensation coverage with other business insurance policies.


  • Some users may prefer more personalized assistance, which could be limited to an online-focused platform.

CoverWallet is known for its digital platform that streamlines the process of getting insurance quotes and purchasing policies. Their user-friendly interface makes it convenient for commercial contractors to explore different coverage options and tailor their workers compensation insurance to their demands. By offering access to multiple carriers, CoverWallet enables contractors to compare prices and coverage details, ensuring they make an informed decision.

Best for: Comparing workers compensation insurance quotes online

Average cost: $65 per month

Our rating: 9.5/10



  • Links you with suitable providers.

  • They focus on technology-driven solutions to streamline the insurance process.

  • Tailored coverage options for various industries, including commercial contracting.


  • Limited customer reviews and industry reputation compared to more established insurers.

Tivly is an emerging player in the insurance industry, focusing on leveraging technology to provide modern solutions for businesses seeking coverage. Their user-friendly platform allows commercial contractors to easily explore and purchase workers compensation insurance. Tivly's approach is rooted in simplifying insurance processes through technology, making them an appealing choice for businesses seeking a digital-first experience. Call and talk with a representative to compare quotes over the phone.

Best for: Comparing workers compensation insurance quotes over the phone

Average cost: $85 per month

Our rating: 9.5/10



  • Thimble offers on-demand coverage, allowing contractors to purchase coverage by the hour, day, or month.

  • Their flexible policies cater to businesses with variable project durations and workloads.

  • Streamlined application process and quick access to certificates of insurance.


  • On-demand coverage might not be the most cost-effective solution for contractors with consistent and ongoing projects.

Thimble's innovative approach to workers compensation insurance provides commercial contractors with the flexibility they need. The option to purchase coverage on-demand, based on specific project requirements, appeals to businesses with varying workloads. Thimble's focus on simplicity and convenience, combined with its unique coverage model, caters to the dynamic necessities of commercial contractors.

Best for: Commercial contractors with project-based work patterns seeking flexible and on-demand workers compensation coverage

Average cost: $40 per month

Our rating: 10/10



  • Two-week money-back guarantee

  • Hiscox is a well-established insurance company known for offering specialized coverage to businesses.

  • A range of coverage options beyond workers compensation


  • Exclusion of coverage in Alaska

Hiscox is a reputable insurer that specializes in providing tailored insurance solutions to businesses of all sizes. Their experience in offering coverage for various industries, including commercial contracting, makes them a valuable partner for businesses seeking comprehensive workers comp insurance for commercial contractors. Hiscox's range of coverage options, along with its reputation for customer service, positions them as a reliable choice for contractors.

Best for: Established commercial contractors seeking specialized workers comp insurance and a wide range of options to protect their business

Average cost: $30 per month

Our rating: 9.5/10

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