A common question we hear from business owners is “how much is workers compensation?” And that of course is with good reason. Being able to budget for the cost of workers comp, health, liability and all the other expenses associated with running your business is an important part of what you do on a daily basis.
The good news is that according to Propublica.org:
“employers are paying the lowest rates for workers’ compensation insurance than at any time in the past 25 years.”
Rates are lower despite the rising costs associated with health care. In states such as Florida, Tennessee and New York, workers comp disability payments for permanent partial disabilities are also lower than ever before. Although, it’s also important to remember that the cost of benefit payments and claims handling is closely tied to what insurers charge for coverage.
How Much Is Workers Comp Insurance for My Business?
So how does all this discussion about lowest rates for coverage and benefits relate to your business?
Every business is assigned workers comp class codes related to their specific industry and the tasks that workers perform. Not all rates are the same for different types of workers.
Additionally, the state sets the base rates for workers compensation insurance, but it’s up to insurance company underwriters, actuaries and executives to determine what the company will charge for their coverage.
Further, no matter the insurer’s rates, a company’s experience modification factor will change those rates to more accurately reflect the pricing for companies based on their previous loss history and experience.