The cost of workers’ compensation (workers’ comp) for small businesses can vary quite a bit, depending on several factors. Here’s a breakdown to help you estimate:
Average Cost:
- Nationally: Small businesses typically pay an average of $45 per month or $542 per year for workers’ comp insurance. (Source: Insureon)
Factors that Affect Cost:
- Business location: Different states have different rules and rates for workers’ comp. States with higher injury rates generally have higher premiums.
- Industry: Industries with higher injury risks due to the nature of work, like construction or healthcare, will have higher premiums.
- Payroll: Premiums are usually calculated as a percentage of your total payroll. The higher your payroll, the higher your premium.
- Number of employees: Generally, the more employees you have, the higher your premium.
- Claims history: Businesses with a history of fewer claims may receive discounts on their premiums.
Additional Costs:
- Deductibles: Some workers’ comp policies have deductibles, which means you’ll be responsible for paying a certain amount out of pocket before the insurance kicks in.
- Administrative fees: Some insurers charge additional fees for things like policy issuance and cancellation.
Helpful Resources:
- Insureon: https://www.insureon.com/small-business-insurance/workers-compensation/cost
- The Hartford: https://www.thehartford.com/workers-compensation/pay-as-you-go-workers-comp
- Next Insurance: https://www.nextinsurance.com/workers-compensation-insurance/
General Tips:
- Shop around for quotes: Get quotes from multiple insurance companies to compare rates and coverage options.
- Consider forming a group insurance plan: Joining forces with other small businesses in your industry can help you negotiate lower premiums.
- Implement safety programs: Taking steps to reduce workplace injuries can help lower your future premiums.
Remember: Workers’ comp is mandatory in most states, so make sure to comply with your state’s requirements. Don’t hesitate to contact a qualified insurance broker for personalized advice on finding the right workers’ comp coverage for your small business.
I hope this information helps! Let me know if you have any other questions.
