Workers’ compensation insurance is important for every business. It protects your employees, but it protects you and your business too. Your employees get the medical care they need if they experience an accident on the job, and you can avoid lawsuits.
This is especially important for high-risk jobs, like the ones found in the construction industry. After all, serious accidents are more likely to happen on a construction site than they are in an office where employees sit at a computer all day.
But, that doesn’t mean you want to pay an arm and a leg for insurance! How much is workers’ compensation, and is there a way to keep costs low?
The Average Cost of Workers’ Compensation Insurance
Conducting a search on the internet isn’t going to tell you exactly how much you can expect to pay on workers’ comp. However, you can find some average costs that can give you a starting point.
High risk work costs more than low risk work. For example, in California, employers pay an average of $0.40 per $100 on payroll for low risk workers, like clerical jobs. High risk labor jobs can cost as much as $33.57 per $100 on payroll.
As you can imagine, construction is considered a high risk labor job, so costs will be on the higher end for contractors.
Things That Affect the Cost of Workers’ Compensation Insurance
Only rough estimates can be found online because there are a lot of things that impact the cost of workers’ compensation insurance.
The risk associated with the work is the first consideration, but there are other things that can affect the cost of workers’ comp like:
- The more workers you have, the more money you will spend
- A history of multiple claims will drive prices higher
- State laws mean some contractors are required to have more coverage than others
- You will pay more if your business operates in more than one state
- More coverage costs more money
How to Keep Costs Low
Just because you are required to have workers’ comp insurance and it has the potential to be expensive doesn’t mean you have to spend more money on a policy than you need to. There are ways to keep costs low.
Keep the job site as clean, tidy, and safe as possible. You should also make sure employees are regularly trained on safety rules. Simple things, like unplugging machines when they aren’t in use and wearing safety goggles, can prevent a lot of accidents that drive premiums higher.
Training should also include making sure everyone knows how to use their tools properly, as well as providing them with high-quality tools. Providing employees with the most up-to-date safety equipment and training them to use that equipment properly may cost more upfront, but it can save you money in the long-run.
Building and maintaining trust with your workers can help a lot too. If someone feels nervous about the materials or equipment being used, if they see a hazard on the job site, or if they see someone else doing things the wrong way, you want them to feel like they can speak up so you can solve the problem together.
Answering a question like “How much is workers’ compensation?” isn’t easy because the answer is different for every industry and every business within that industry. It’s important to do your research and work with an insurance broker who can provide you with the right coverage at the right price.
DJM Insurance is well-versed in workers’ compensation insurance. Whether you’re looking for a new policy, you want to find ways to save on an existing policy, or you just have a few questions you would like to ask an expert, contact us, and we would be happy to help.