The average electrician workers’ comp rate in 2024 is $2.63 per $100 of payroll, which breaks down to roughly $87 per month per employee. This insurance covers electricians in the event of work-related injuries or illnesses. Your actual premium will vary based on factors like your state, the size of your payroll, and your claims history.
What is an Electrician Workers' Comp Premium based on?
Electrician workers' comp premiums depend on a few key factors:
Your Industry
The cost of workers' comp insurance varies by industry because some jobs are riskier than others. The National Council on Compensation Insurance (NCCI) assigns a four-digit class code to each job. This is like a barcode for easy reference.
Each class code is assigned a risk level. The risk level is based on how likely it is for workers to get hurt and how serious those injuries are, using historical data from each state and industry.
Jobs with more injuries, like construction or manufacturing, have higher workers' comp risk rates than safer jobs, like office work.
For electricians, most states use these main codes (though some states like Pennsylvania and Delaware have different codes):
- 5190 for most residential and commercial electricians
- 7605 for electricians installing burglar and fire alarms
- 9516 for electricians installing, servicing, and repairing home theater equipment
These codes can make a big difference in your premium. For more details, check out our electricians' workers’ comp class code guide.
Your Payroll
Workers' comp premiums are based on your payroll and are usually given as a rate per $100 of payroll. The bigger your payroll, the higher your premium because there's a greater chance of injury.
Your Claims History
Your claims history is another important factor. If your business has had many injuries and accidents, your premiums will be higher because of the increased claims costs.
If you are just starting out, you won't have a claims history, and it won't be considered until you have a few years of records. If you already have a high number of claims, there are steps you can take to manage and reduce them.
How are Workers' Compensation Premiums calculated for Electricians?
Here's a simple formula to calculate your workers' comp premium:
Payroll divided by 100 x rate = Premium
Calculate the Payroll
Payroll is the total amount of money you pay your employees throughout the year. Make sure to include all your employees in this calculation.
To estimate the annual payroll, take the hourly rate of each employee and multiply it by the hours they work per week and weeks they work per year.
Divide the payroll figure by 100 to obtain the Payroll Per $100. This is how much insurance you have to pay for every $100 of payroll.
Find your Rate
Next, you need to find the industry rate for your state.
There are three ways to do this:
- Use the national average for class code 5190, the most common electrician code, from one of our leading carriers, which is $2.63.
- If you have an existing policy, check your policy in the section that breaks down the premium. The first line usually lists the class code, projected payroll, and the rate per $100 of payroll.
- If you're a standard electrician using code 5190, use the list below to find your rate in selected states from a leading national carrier.
5190 Electricians’ Comp Rates per $100 of Payroll
- Alabama: $2.78
- Arkansas: $1.19
- Connecticut: $3.05
- Florida: $3.23
- Georgia: $2.10
- Louisiana: $2.15
- Maine: $1.74
- Maryland: $2.88
- Massachusetts: $2.98
- Mississippi: $2.66
- Missouri: $2.83
- New York: $6.85
- North Carolina: $2.57
- Rhode Island: $2.54
- Tennessee: $2.19
- Texas: $1.57
- Virginia: $1.43
Let’s work through an example together:
Let's say you're an electrician based in Miami, Florida with a team of 4 techs and 1 office assistant. Your team needs to be covered by an electrician workers' comp insurance policy under Code 5190 that you, as the employer, pay for and provide. Let's use the formula to figure out your premium.
Payroll divided by 100 x rate = Premium
Step 1: Calculate Payroll
We need the annual payroll of each employee.
- The 4 full-time techs are making $19/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $39,520 for each tech.
- The office assistant is making $20/hour, multiplied by 40 hours and 52 weeks for an annual payroll of $40,642 for the office manager.
Step 2: Determine Rates
Now you have to figure out which class code applies to each employee and find the corresponding rate.
- The techs are considered electrician employees and classified as Code 5190 with Florida’s rate of $3.23.
- The office assistant should be classified as a clerical-only person which is Code 8810 with Florida’s rate of $0.13.
Step 3: Apply the Formula
Here’s how to apply the formula. You need to do it separately for each class code. Let’s do class code 5190 first.
Class Code 9082: First, add the entire 9082 payroll:
- 4 full-time techs: $39520 x 4 = $158,080
Apply the formula: $158,080 (payroll) divided by 100 x $3.23 (Industry rate) = $5,107
Class Code 8810: Do the same for the bookkeeper.
Apply the formula: $40,642 (payroll) divided by 100 x $.13 (Industry rate) = $52
Combine both for a total annual premium $5,107 + $52 = $5,159.
This would be in addition to taxes and fees which usually add a few hundred dollars to your premium.
Remember that the actual premium may vary depending on factors such as your business's experience modification number, specific state regulations, and any discounts provided by your insurance carrier.
Annual Cost of Workers' Comp for 5190 Electricians
To get a sense of what each 5190 full time electrician will cost, here is an average premium of the costs for a few states.
Does it matter where I buy a Policy from?
When you’re comparing insurance quotes, you might be wondering if there is a difference between companies or if you can just go with the cheapest option.
The short answer is: yes, it does matter. It's not just about finding the cheapest option; it's about finding the right fit for your business needs.
As a business owner, you need an insurance policy that has the right coverage options. You also need the insurance company to be reliable and be there for your employees if they get injured, to manage their care and help them get better and back to work.
Here are some factors to consider when choosing an insurance provider:
- Reputation: Select a provider with a strong reputation for efficiently handling workers' comp claims. This ensures your employees get the necessary support quickly in case of an injury.
- Financial Strength: Choose a company with solid financial stability. This guarantees they have the resources to pay out claims when needed.
- Customer Service: Good customer service is crucial when dealing with insurance claims. You want a company that is responsive and helpful, ready to assist with any issues that arise.
- Industry Expertise: Opt for insurance providers with experience in the electrical industry. They will be better equipped to offer appropriate coverage and handle claims specific to your field.
What are the benefits of Workers' Comp?
Medical Expenses
Workers' Comp Insurance for electricians covers all medical expenses if a worker is injured or gets sick because of their job. This includes surgeries, rehabilitation, therapy, and sometimes even transportation to medical appointments.
Lost Wages
When an employee is unable to work due to a work-related injury or illness, workers' comp not only covers their medical costs but also compensates for lost wages. This means employees can still receive income while they recover, allowing them to focus on healing.
Death Benefits
If an employee dies due to a work-related incident, workers' comp provides death benefits to the surviving family members. This includes covering funeral expenses and offering financial support to dependents, easing the financial burden during a tragic time.
Protection from Lawsuits
Workers' comp also shields your electrician business from potential lawsuits. By having this insurance, you minimize the risk of facing legal action and court costs from injured employees.
How can I make Workers' Comp Cheaper?
Implement a Safety Program
Creating a formal safety program can significantly reduce accidents and claims, and insurance underwriters will usually offer a discount for having such a program.
Implementing a safety program shows insurance companies that you are serious about reducing risks and protecting your workers. This makes you a lower-risk client, which can lead to immediate discounts on your premiums. It’s one of the fastest and most reliable ways to save on workers' comp insurance.
For your electrical business, a safety program should include:
- Regular safety training for employees
- Provision of personal protective equipment (PPE)
- Clear guidelines for safe electrical practices and handling of equipment
Ensure Class Codes are Correct
Make sure your workers' comp class code accurately reflects your electrical business operations. Errors in class codes can result in higher premiums, so it's crucial to verify that your class code is correct.
Ask about Premium Discounts
Talk to your insurance provider about potential discounts. Some companies offer credits for maintaining a safe work environment or having a strong claims history. Be proactive and ask if your electrician business is eligible for these discounts.
Work on Reducing Claims
Effectively managing and preventing incidents in your workplace can lower your claims history, or Experience Modification Rate (ExMod). By implementing robust safety measures and addressing potential risks, you can improve your ExMod over time, resulting in lower premium costs.
See more Cost Saving Tips for Electrician Workers’ Comp.
Get a more precise Estimate
Do you want a more precise number for workers' comp rates for your electrical business? Try our easy-to-use online quote tool to get a more accurate estimate of what workers' comp will cost your electrician business.
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.
Legally, workers’ comp is not needed for 1099 employees. However, if the employee lacks coverage, you may be held liable in case of injury. Also, if a state or federal authority determines your 1099 workers are not in fact independent contractors, they must be reclassified as employees. That also means you’re required to provide them with workers’ compensation insurance.
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