In 2025, the average workers' comp rate for HVAC is $3.14 per $100 of payroll. This insurance covers work-related accidents or illnesses for HVAC workers.
What is Workers' Comp Premium for HVAC workers based on?
Your exact premium will depend on factors like your state, payroll, and claims history:
Your Industry
Workers’ comp insurance costs vary by industry. It all depends on the level of risk in your type of work.
The National Council on Compensation Insurance (NCCI) categorizes job roles with four-digit class codes. Each industry gets a class code matched to it, similar to a barcode, so others can easily reference it.
Each class code has a risk level which is based on how likely a worker in a particular industry is to get hurt and how bad the injury usually is.
High-risk industries like construction or manufacturing tend to have higher risk levels, which leads to higher workers' comp rates. In contrast, lower-risk industries, like office-based businesses, have lower risk levels and, therefore, lower rates.
Most HVAC businesses fall under class code 5537, which covers the installation, service, and repair of HVAC systems and refrigeration systems.
Some HVAC businesses may fall under class code 3724 for refrigeration work not connected to HVAC systems.
These codes significantly impact your premium, so it's important to make sure that your business is correctly classified. For more details, check out our HVAC class code guide.
Payroll
Premiums are calculated per $100 of payroll. Higher payroll means higher premiums, as more employees increase the potential for injury.
Claims History
A history of frequent injuries and accidents can lead to higher premiums. However, new businesses without a claims history won't be affected by this factor.
How are Workers' Compensation Premiums calculated for HVAC workers?
Here's a simple formula to calculate your premium:
Payroll divided by 100 x rate = Premium
Step 1: Calculate the Payroll
Determine the total annual payroll for all HVAC employees.
If you don't have the annual numbers, calculate each employee's hourly rate multiplied by their weekly hours and the number of weeks worked per year.
Step 2: Find your Rate
Find the workers' comp rate for your industry and state:
- Use national averages: Code 5537 is $3.14, and Code 3724 is $3.03.
- Check your existing policy for rate details.
Example Calculation
Let’s say you run an HVAC company in Louisiana with 4 technicians and 1 office employee. To ensure your business and employees are protected, you need an HVAC workers’ comp insurance policy.
Here’s how to calculate your premium:
1. Calculate Payroll
Here’s how:
- The 4 HVAC workers earn $24/hour, multiplied by 40 hours a week for 52 weeks for an annual payroll of $50,400 per technician.
- The 1 full-time office employee earns $19/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $39,520.
2. Determine Rates
Now you have to find the corresponding rate.
- The HVAC workers are classified as Code 9015 with Louisiana’s rate of $3.35.
- The office employee falls under Code 8810 with a rate of $0.16.
3. Apply the Formula
Apply the formula separately for each class code. Let’s do class code 5537 first.
- For technicians: Add the entire 5537 payroll:
4 full-time HVAC workers: $50,400 x 2 = $100,800
Apply the formula: $100,800 (payroll) divided by 100 x $3.35 (industry rate) = $3,380
- For the office employee: Add the 8810 payroll:
1 full-time office person: $39,520
Apply the formula: $39,520 (payroll) divided by 100 x $.16 (industry rate) = $63
Combine both for a total annual premium $3,380 + $63 = $3,443.
This is an estimate and could vary based on additional factors like state regulations and discounts.
Annual Cost of Workers' Comp for 5537 HVAC workers
To get a sense of what each 5537 full time HVAC technician will cost, here is an average premium of the costs for a few states.
Does it matter where you buy a Policy?
When shopping for HVAC workers' comp insurance, price isn’t the only factor. Consider the reliability of the insurance company, the speed of their claims processing, and their customer service.
Look for a company with a strong reputation, financial stability, and expertise in the HVAC industry. This ensures your employees get the help they need promptly if injured.
What are the benefits of Workers' Comp Insurance?
- Medical Expenses: Covers treatment for work-related injuries or illnesses
- Lost Wages: Compensates employees while they recover
- Death Benefits: Provides support for families of employees who die from work-related incidents
- Lawsuit Protection: Protects your business from legal action by injured employees
Tips to Lower your Workers' Comp Premium
- Implement a Safety Program: Regular training, double-checking power is off before work, and using PPE like gloves, goggles, mats, steel-toed boots, and earplugs can reduce accident risks.
- Check Class Codes: Make sure your workers are classified correctly. Incorrect codes can lead to higher premiums.
- Ask About Discounts: Some insurance companies offer discounts for a safe work environment or good claims history.
- Work on Reducing Claims: Lowering your claims history can reduce premiums over time.
See more Cost-Saving Tips for HVAC workers Workers’ Comp
Find Out Your Exact Workers' Comp Costs
Want to know the specific workers' comp rates for your HVAC business? Use our online tool for a tailored estimate and see how much you could save!
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
To get your ballpark premium amount, all you need is payroll and which class code. Most insurance companies are going to dig into specific questions to find out the risks associated with your business operations.
