Workers’ comp insurance helps pay bills associated with work-related injuries, illnesses, or fatalities, including medical care, lost wages, and funeral costs. Most states require businesses that have employees to maintain workers’ comp coverage for them.
In some cases, however, you may be able to apply for a workers’ comp exemption for certain types of employees like independent contractors. If the request is granted, that means you aren’t required to have workers’ comp for the people the exemption covers.
A workers’ comp exemption may be granted in some states for positions like:
Each state has different workers’ compensation requirements, so it’s important to understand the regulations that apply to your business. Also, if you earn an exemption but then hire employees or pay uninsured subcontractors to do work for you, your exemption likely no longer applies and you’ll need to obtain a workers’ comp policy.
Getting a workers’ comp exemption from your state government may help you save money on insurance costs. But it’s important to understand the risks if you choose not to have coverage.
For example, if you’re a sole proprietor who is granted a workers’ comp exemption and decides not to get workers’ comp insurance, you may be faced with paying your medical costs out of pocket if you suffer a work-related injury.
Consequently, it’s a good idea to get a workers’ compensation insurance quote. Coverage is very affordable, and when you consider how costly medical care can be, getting a workers’ comp policy is often a wise business decision.
We offer workers’ comp insurance coverage in all states where we are allowed to by law. Four states—Ohio, North Dakota, Washington, and Wyoming—require that businesses get their workers’ comp insurance coverage from an entity designated by the state.
Our licensed insurance experts are always happy to assist you. But answers to some of the workers’ comp insurance questions we get asked most often are below for your convenience.
Although workers’ compensation insurance provides broad coverage for work-related injuries and illnesses, there are some exclusions. For example, injuries outside of work aren’t covered, and commuting to and from work generally isn’t covered, though there may be coverage in some states. In addition, intentional injuries and those occurring as a result of substance abuse or intoxication aren’t covered.
The amount you pay for workers’ comp insurance is based on your total payroll. Insurers charge you a percentage of your payroll for coverage. The percentage, also called your rate, is based on a variety of factors including your industry and the type of work your employees perform. A workers’ comp audit is an industry-standard process that helps us ensure you’re paying the right amount for your coverage. It involves sending us certain payroll documents after your policy expires so that we can evaluate them and ensure you pay based on your actual employee payroll during the policy period. If the actual payroll is higher than you estimated when you purchased the policy, we send you a bill for the difference. If the actual payroll is lower, we send you a refund for the difference, subject to minimum premiums.
The average cost of workers’ comp insurance per $100 in wages ranges from $.75 in Texas to $2.74 in Alaska. Premiums are calculated based on your company’s gross annual payroll. The higher your payroll, the higher your premiums.
This varies by location, but our licensed insurance experts can help you understand the rules and requirements for your state.
You should contact us if you expand to a new state, get into new operations, or have a substantial increase in payroll. We can tell you how your policy will be affected.