What is the Average Cost of Workers’ Compensation Insurance?

Calculating Average Cost of Workers’ Compensation Insurance
By: 
Mordechai Kamenetsky
November 20, 2024
Last Updated: 
February 20, 2023
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The average cost of workers compensation insurance is around $94 per month. However, this figure varies widely based on factors like your industry, claims history, and location.

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The Average Cost of Workers’ Compensation Insurance by Industry Type

The true cost of workers' comp is best understood when broken down by industry type. Since industries vary widely, using an average for the whole market can be overly simplistic, or even misleading. Here’s how costs differ across various industries:

White Collar Industries

White-collar jobs are generally low-risk professions that don't involve physical labor or manual tasks. Examples include:

  • Accountants: $6 per month
  • IT Professionals: $10 per month
  • Outside Sales: $15 per month
  • Engineers/Architects: $17 per month

Average Premium: The average workers' comp premium for a white-collar professional is $10 per month.

Retail & Service Industries

These industries involve customer interaction with moderate physical risk, such as lifting, walking, or potential slips and trips. Examples include:

  • Restaurants: $28 per month
  • Retail Stores: $46 per month 
  • Cannabis Dispensaries: $59 per month
  • Janitorial Services: $67 per month
  • Hotels: $69 per month

Average Premium: The average workers' comp premium for retail/service industries is $46 per month.

Artisan Contractors

Skilled tradespeople in industries like plumbing, electrical work, or landscaping typically work in smaller teams or independently. Examples include:

  • Electricians: $87 per month
  • Plumbers: $114 per month
  • Property Managers: $120 per month
  • HVAC Contractors: $133 per month
  • Landscapers: $137 per month
  • Painters: $211 per month

Average Premium: The average workers' comp premium for artisan contractors is $120 per month.

General Contractors & Construction

Construction jobs tend to be physically demanding and high-risk, with heavy machinery, heights, and labor-intensive work. Examples include:

  • Concrete Construction: $246 per month
  • Masonry: $337 per month
  • Framing: $357 per month
  • Carpenters: $480 per month
  • General Contractors: $579 per month

Average Premium: The average workers' comp premium for construction industries is $337 per month.

High-Risk Industries

This category includes jobs with substantial safety concerns due to machinery, hazardous materials, or physically demanding tasks. Examples include:

  • Manufacturing: $149 per month
  • Tree Removal: $231 per month
  • Roadside Assistance: $270 per month
  • Roofers: $517 per month
  • Loggers: $939 per month

Average Premium: High-risk industries typically face the highest premiums, with an average workers' comp premium of $517 per month.

All data has been derived by combining ZipRecruiter national payroll averages per industry with average rates of a national carrier partner. Figures are for illustrative purposes only and do not include taxes or additional fees.

Kickstand Tip


Kickstand Tip

To get an accurate estimate for your business, the two most important questions are:

  1. What is your industry?
  2. What is your payroll amount (before taxes)?

By answering these questions, we can give you a better idea of what your specific premium will be. Want to know exactly how much your premium will be? Get a free quote tailored to your business.

From our Files: 2024 Workers' Comp Rates in Action!

From our Files: 2024 Workers' Comp Rates in Action!

Wondering how much workers' comp really costs for different industries? We've gathered some numbers straight from our client files to give you a glimpse into what businesses like yours are paying in 2024. 

Keep in mind, these are just a few examples, but they should give you a good idea of what to expect.

Check out the premiums for some of the industries we work with:

  • Cannabis Cultivation (10 workers): $743/month
  • Cannabis Dispensary (4 part-time workers): $103/month
  • Electrician (1 worker): $88/month
  • Home Health Care (15 part-time workers): $483/month
  • Janitorial Service (3 part-time workers): $230/month
  • Landscaper (5 workers): $380/month
  • Mechanic Shop (4 workers): $373/month
  • Painter (1 worker): $91/month
  • Plumber (1 worker): $113/month
  • Restaurant (6 workers): $320/month
  • Retail Store (3 part-time workers): $88/month
  • Trucker (1 worker): $110/month

Source: Kickstand Insurance

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How does my payroll affect my premium? 

The size of your payroll plays a direct role in determining your workers' compensation premium. The more you pay your employees, the higher your premium will be. This is because premiums are based on your total payroll amount.

Here’s a basic formula to calculate premiums:

Annual Payroll ÷ 100 × Rate = Annual Premium

For example, if your business has $500,000 in payroll and your industry rate is $3 per $100 of payroll, your calculation would look like this:

$500,000 ÷ 100 × $3 = $15,000 annual premium

What else affects my premium?

Several factors can influence your workers’ compensation premium:

  • Location: Since workers’ comp is state-regulated, rates vary by state. States with higher claim costs or stricter regulations may have higher premiums. Check out our Workers' Compensation Rates by State blog for more details.
  • Claims History: Your Experience Modification Factor (ExMod) compares your business's claims to others in your industry. A higher ExMod means a higher premium. A clean claims history can lower your premium.
  • Employer Liability Limits: Workers' comp covers medical costs, but employer’s liability insurance covers legal expenses if an employee sues. Choosing higher liability limits (e.g., $1 million) increases your premium slightly but provides added protection.
  • Credits, Debits, and Discounts: Some states offer credits (discounts) or debits (surcharges) based on factors like claims history. Carriers may also offer dividends if your business has few claims, potentially lowering your premium.

How much can I expect Workers’ Comp fees to be?

The most common fees added to a workers’ comp premium include:

  • Expense Constant: This fee typically ranges from $160 to $200.
  • Terrorism Fee: A small fee, often just a tiny percentage, included in every workers' comp policy.
  • State-Specific Fees: Some states charge their own fees or assessments, such as scheduled credits or Ex-Mod adjustments, which can affect your overall premium.
Calculating Average Cost of Workers’ Compensation Insurance

What is the typical pay schedule for Workers' Comp Premiums?

The typical pay schedule for workers' compensation insurance is usually one of the following, although there are others as well.  

  • 15% Down Payment: Some carriers require an upfront payment of 15% of your premium and the remaining premium is split into 9 monthly payments.
  • 12-Month Installments: Some carriers offer 12 equal monthly installments, though taxes and fees may need to be paid upfront. 

Want to know your exact workers’ comp premium?

Get a tailored quote based on your business’s specific needs and location. Get Your Free Quote Now!

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

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.

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