Workers’ Compensation Rates
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.
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?
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’ 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
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