Understanding Workers’ Comp Rates – Updated 2021

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Workers’ Compensation Rates

workers' compensation rate Whether you own a small, medium or large business, it’s likely you’ll need workers’ compensation insurance if you have employees. Workers’ compensation rates for this type of insurance, commonly known as workers’ comp insurance, can change each year and have an impact on your business’ finances.
 
If your employees get hurt or sick from their job, workers’ compensation benefits can help cover:
 
  • Medical bills
  • Lost wages
  • Disability payments
  • Funeral expenses if they lose their life in a workplace accident
And, if your employee or their family sues you, workers’ comp can help cover your business’ legal costs.
 

How Are Workers’ Comp Rates Calculated?

workers' compensation rates by class code We know workers’ comp can seem complex. You may be wondering, “How is workers’ comp calculated?” But don’t worry. We’re here to help you understand what goes into your workers’ comp rate. 
 
Insurance companies calculate your rate by looking at several factors, including:
 
Workers’ compensation class codes: These codes are assigned by the National Council on Compensation Insurance (NCCI) or your state. Each employee gets a unique code based on the type of work they do. You can use this classification system to calculate your workers’ compensation rates.
 
Payroll: As a business owner, you’ll need a certain amount of workers’ comp insurance based on every $100 of payroll.
 
Experience modification number: This number takes into account your business’ experience and loss history. The safer your business, the lower your experience modification number. These numbers are subject to state requirements and not every policy may have one.
 
The best way to find the right coverage at the right price for your business is to get a quote from more than one insurance company. You can also work with insurance agents to get the pricing you need. From there, you can compare insurance premiums. To get started, get a quote from us today.
 

Workers’ Comp Rates by State

workers comp rates by state Workers’ compensation rates can vary greatly from state to state. For example, rates in Oregon are expected to drop in 2021 for the eighth-straight year.1 On average, employers will pay $1 per $100 of payroll for workers’ comp in 2021. This is down from $1.05 in 2020.2 But in California, the average premium in 2021 is $1.56 per $100 of payroll.3
 
Differences in each state’s rates have to do with a number of factors. Workers’ comp laws, for example, can impact which businesses need insurance and how much coverage they have to carry. Each state may also have a medical fee schedule, which details costs for workers’ comp treatments. If the medical costs are higher, it can increase the workers’ comp rate in that state.
 
How you get workers’ comp insurance can also affect rates. Being able to shop around for quotes means you can get coverage at the right price for your business. But in some states, like North Dakota, businesses have to get coverage through state fund workers’ comp. That means these companies pay whatever rates their state sets for workers’ comp.
 

Highest Workers’ Comp Rates

workers' comp rates Generally, the higher-risk a job is, the more it’ll cost for workers’ compensation insurance. Some high-risk jobs include:4
 
Don’t forget, workers’ compensation class codes are only one factor in a workers’ compensation rate. So your business’ specific cost can change depending on other factors.
 

2021 Workers’ Comp Rates Trends

Workers’ comp rates in 2020 were mixed. But rate filings in many states show workers’ compensation costs decreasing in 2021. To learn more and see what your premium will be, get a workers’ compensation quote today.  
 
 
 
 
 
The Hartford shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature.
 
The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined following a claim investigation.
 
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In Arizona, New Hampshire, Washington and California, the insurance is underwritten by Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Lloyd’s Insurance Company, Hartford Underwriters Insurance Company, Maxum Casualty Insurance Company, Maxum Indemnity Company, Navigators Insurance Company, Navigators Specialty Insurance Company, Pacific Insurance Company, Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company and Twin City Fire Insurance Company. The Hartford® is The Hartford Financial Services Group, Inc. and its subsidiaries, including Hartford Fire Insurance Company.
 
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.
 
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