Best Workers’ Compensation Insurance Of 2024

Workers’ compensation insurance pays out when employees become injured on the job or sick because of their work—such as when an employee gets sick from chemicals at work.

Coverage includes an employee’s medical treatment and ongoing care, missed wages, disability benefits and funeral costs if the employee dies in a work-related incident.

If you’re shopping for workers’ comp, you may be wondering who the biggest workers’ comp insurers are. See a ranking of market share below.

Workers’ compensation laws are based on state statutes, so requirements vary depending on where you are doing business. Check the workers’ compensation insurance laws in your state to see how much insurance you are required to buy.

If your business operates in additional states, you will have to follow those state statutes as well.

Workers’ Compensation Insurance Rules by State

What Happens if I Don’t Have Workers’ Compensation Insurance?

Workers’ compensation insurance is state-mandated, so each state has its own workers’ compensation laws and penalties. Employers that don’t carry the required coverage could face fines, criminal charges or jail time.

Not having workers’ comp insurance also opens businesses up to lawsuits. If you don’t carry workers’ comp insurance and an employee gets injured or becomes ill because of the job, they could sue you in an effort to recoup their medical expenses.

This is especially important to keep in mind as work-related injuries and illnesses are on the rise. Private industry employers reported 2.8 million nonfatal workplace injuries and illnesses in 2022, up 7.5% from 2021, according to the most recent data from the U.S. Bureau of Labor Statistics. Injuries increased 4.5% to 2.3 million cases, and illnesses jumped 26% percent to 460,700 cases.

Workers’ compensation insurance costs small business owners an average of $47 a month, or $560 annually, according to Trusted Choice, a group for independent insurance agents.

This is an average for “middle of the pack” small businesses, in terms of business size and risk level. Larger companies in an industry with more risk, such as construction, will pay much more.

Median Workers’ Compensation Premium by Industry

What Factors Affect my Workers’ Comp Insurance Premium?

There are several factors that can impact how much you pay for workers’ compensation insurance, including:

• Location. Your state dictates how much workers’ comp coverage you need. Employers in states with higher requirements are likely to pay more for their workers’ comp insurance.
• Type of business. Your industry will affect how much you pay for your workers’ comp insurance. Some jobs are more dangerous than others, such as a building designer compared to a construction worker.
• Claims history. Your insurer will look at your company’s history of workers’ compensation claims to determine your company’s likelihood of filing a claim.
• Payroll size. Businesses with more employees and higher payroll pay more in workers’ comp premiums.

There are several facets of a workers’ comp policy, including:

Medical Expenses

A workers’ compensation insurance policy offers coverage for injured or ill employees’ medical treatment when the cause relates to their job. This can include payment for doctor’s visits, emergency room visits, surgery, medication and ongoing care.

Medical expenses related to Covid might be covered, depending on your state and occupation. The National Council on Compensation Insurance tracks legislation related to workers’ comp coverage of Covid.

Lost Wages

When an employee is injured or becomes ill because of their job, it often leads to time off for healing. During this time, your workers’ compensation insurance typically pays partial wages. This helps ensure the affected parties still have income during their recovery period.

Disability Benefits

If your employee sustains a job-related injury or illness that results in a disability, full or partial disability benefits can help your employee pay their medical bills and supplement some of their lost wages.

Disability benefit classifications

Continuing Care

If an employee has a work-related injury or illness that requires extended care, workers’ compensation insurance can help pay for ongoing care like physical therapy.

Death Benefits

If the worst happens and your employee dies from a work-related injury or illness, your workers’ compensation insurance will usually cover funeral and burial expenses as well as survivor benefits for their beneficiaries.

There are some work-related injuries and illnesses that workers’ compensation insurance generally will not cover.

• Commute. Accidents that happen on the way to or from work are usually not covered.
• Alcohol or drugs. If an injury occurs while the employee is under the influence of alcohol or illegal drugs, workers’ comp insurance will likely not cover it.
• Intentional injuries. Workers’ comp policies exclude injuries that occur intentionally.
• Recreation. Any injuries from recreational activities are typically excluded, even if they occur on the work premises.
• Food poisoning. If you get food poisoning on your lunch break from food you bought or brought from home, this does not qualify for workers’ compensation because the break was not work-related.

A workers’ compensation insurance policy may have other exclusions, so check your policy carefully.

To get the best workers’ comp insurance for your business, follow these steps.

1. Learn state requirements. Even for industries that are generally considered safe, some level of workers’ comp insurance may be required in each state where you have employees. Check your state workers’ compensation laws to make sure your company is in compliance.
2. Determine where to buy insurance. Your state also decides who sells and handles workers’ comp policies: a state-run agency, private insurance companies or the state itself. Four states—North Dakota, Ohio, Wyoming and Washington—require employers to buy workers’ comp insurance from a government-operated fund, rather than from a private insurer. If your company has employees in one of these monopolistic states, or sends employees to work there, you may need to purchase workers’ comp insurance from its state fund.
3. Work with an agent. In states where you’re permitted to buy workers’ comp insurance from a private insurer, you can work with an insurance agent to compare quotes. Note that these quotes may change after insurance companies have taken a closer look at your business risk factors.
4. Lower your risk to lower your premium. For lower workers’ comp premiums, focus on safety in the workplace. Assigning a safety manager, holding regular safety meetings and keeping your buildings and equipment up to code may get you a discount.

We scored the 25 largest workers’ compensation insurance companies (with available data) based on their financial strength and the level of workers’ comp complaints against them in 2022.

Level of complaints (90% of the score): We scored companies based on upheld complaints made to state insurance departments nationwide and collected by the National Association of Insurance Commissioners.

Financial strength (10% of the score): We scored companies based on their financial strength ratings from AM Best.

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