Every state has regulations regarding workers’ compensation insurance. The cost of your traditional workers compensation plan depends on a variety of factors. How much you’ll ultimately pay depends on the size of your business and the risk involved with your industry. Here is what you need to know about workers’ compensation costs.
When it comes to the cost of workers’ compensation, you need to consider your state, payroll, industry, employees’ tasks and claims history. Physically demanding work tends to have a higher premium rate. For example, construction workers may have $3,000 in premiums, whereas an accountant has $396 premiums.
Bigger businesses will also pay more in workers’ compensation premiums. When you have many employees, there are more chances that someone could be injured while on the job.
To calculate your premiums, you have to multiply a specific rate for every $100 of your payroll. You determine your premiums based on the work that your employees do. The formula that insurers use is your employees’ classification rate, your claims history and your payroll.
In some states, the state provides workers’ compensation insurance. However, in most states, you can purchase it from a private insurer. If you have employees, regardless of whether you are a small business, odds are you need some form of workers’ compensation.