How much does workers’ compensation insurance cost?

Three official measures of what comp costs

Government and statistical agencies measure workers’ comp cost three ways. None of them is a quote, but each tells you something an insurer’s average cannot.

Cost per hour worked (BLS). The Bureau of Labor Statistics surveys employers every quarter. In June 2026 private employers spent an average of $0.43 per hour worked on workers’ comp, 0.9% of total compensation⁠¹. The average covers every worker in the group, from office staff to laborers:

Average employer cost per employee hour worked for workers' compensation and for health insurance, averaged across all workers in the group, plus workers' compensation as a percent of total compensation. Group averages mix high- and low-risk jobs, so they are not a premium rate for any single business. U.S. Bureau of Labor Statistics (BLS), National Compensation Survey, June 2026 (2026 Q2), private industry workers, released 9 Sep 2026.

Construction, at $1.10 an hour, costs about two and a half times the private-industry average (our calculation: 1.10 ÷ 0.43 = 2.56). Financial activities cost $0.23⁠¹. The two columns can rank industries differently. Leisure and hospitality spends only $0.27 an hour, but that is 1.2% of its compensation, more than double the 0.5% share in information, where the hourly comp cost is higher ($0.42) but total compensation is higher still⁠¹. Comp is priced per $100 of payroll, so the percentage column is the closer guide to how rates compare. The workers’ comp cost by industry page has the occupation, region and firm-size breakdowns.

Cost per $100 of wages (NASI). The National Academy of Social Insurance adds up what employers actually spent: premiums plus deductible reimbursements for insured employers, and benefits plus administration for self-insurers. In 2023 that came to $106.55 billion, or $0.98 per $100 of covered wages⁠². This figure is after every mod, credit and discount, so it is the closest thing to an actual national average price. It is also old by the time it appears: the 2023 figures were published in August 2026⁠².

Price index per $100 of payroll (Oregon). Oregon’s Department of Consumer and Business Services prices the same mix of 53 class codes in every state. In its 2024 study the median state, Georgia, came out at $1.09 per $100 of payroll, with Hawaii highest at $2.52 and North Dakota lowest at $0.50⁠³. DCBS warns that these are not the rates employers actually pay⁠³. Both state measures, for all 51 jurisdictions, are on the workers’ comp cost by state page.

What insurers and brokers report

Insurer figures describe each company’s own policyholders. For comp those are mostly very small employers buying online:

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

Insureon’s $54 a month ($643 a year) is a median, even though the page calls it an average: its method note says figures are “calculated using the median cost of policies sold.” The sample is about 100,000 customers, most with fewer than five employees, and annual premiums run from about $300 to more than $5,000. Size matters: Insureon reports $62 a month for customers with three to five employees and $160 for those with 10 or more⁠⁴. ERGO NEXT does not publish an overall median. It says 49% of its comp customers pay $14 to $75 a month⁠⁵. Its disclosure says the data come from customers who bought “commercial property insurance,” which looks like a copy error on the page⁠⁵.

A $54 median and a $0.43 hourly BLS average do not conflict. Five full-time employees working 10,000 hours a year would cost $4,300 at the all-industry BLS average (our calculation: 10,000 × $0.43). The BLS average covers all private employers, large ones and high-hazard industries included, while Insureon’s customers are mostly businesses with fewer than five employees⁠⁴.

By type of business and by state

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

NEXT’s construction average ($160 a month) is 3.2 times its accountant average ($50)⁠⁵. The gap comes from class rates: comp prices the work your employees do, not the business’s revenue.

Insurer- and broker-reported figures from each company’s own customers, as published on its website; not a random sample of all businesses. Figures are rounded as published.

In the 10 states in Insureon’s table, medians run from $34 a month in Texas to $65 in Florida; elsewhere on the page Insureon puts the state range at $34 in Texas to $127 in Alabama⁠⁴. Texas makes comp elective for private employers⁠¹⁰, so its buyers are employers who chose to insure. Each state median also reflects the mix of businesses buying through Insureon there, so do not read the table as a state price ranking. Use the official measures above for that.

What the policy pays: Part One, Part Two, Part Three

The standard policy form, NCCI’s WC 00 00 00 C⁠⁶, has three coverage parts, and only one of them has a dollar limit.

• Part One: workers’ compensation. The insurer will “pay promptly when due the benefits required of you by the workers compensation law” of each state listed in Item 3.A of the information page. It also defends claims for those benefits⁠⁶. There is no dollar limit, because the state statute sets the benefits.
• Part Two: employer’s liability. This covers lawsuits against you over an employee’s injury that the comp system does not bar. The form lists four kinds: a third party that was sued by your employee and then sues you, claims for care and loss of services, injury to the employee’s spouse, child, parent or sibling that results from the work injury, and claims against you “in a capacity other than as employer”⁠⁶. Limits are shown in Item 3.B, as three amounts: each accident, disease policy limit and disease each employee⁠⁶. Part Two excludes punitive damages for an employee employed in violation of law, and fines or penalties⁠⁶.
• Part Three: other states. This covers work that starts during the policy year in a state listed in Item 3.C. If you already had work on the start date in a state not listed in Item 3.A, coverage applies only if you tell the insurer within 30 days⁠⁶.

Contracts usually set the Part Two limit. California’s sample state-contract clause requires “statutory workers’ compensation and employer’s liability coverage” with employer’s liability limits of $1,000,000. It also requires a waiver of subrogation endorsement in the state’s favor⁠⁷. The City of San Diego’s insurance checklist includes the matching California form, WC 04 03 06⁠²⁹. Raising the Part Two limit and adding the waiver both change the premium. Pennsylvania’s premium algorithm has a line for employer’s liability increased limits and separate lines for waiver of subrogation charges⁠¹¹.

Who must carry it

Each state sets its own threshold. A few examples show how far apart they are:

• California: employers must carry comp “even if they have only one employee”⁠⁸.
• Florida: coverage applies to private employers with four or more employees, or one or more in construction⁠⁹.
• Texas: coverage is elective for private employers⁠¹⁰. An employer without it, if sued by an injured employee, cannot defend on contributory negligence, assumed risk or a fellow employee’s negligence⁠¹⁰.

The full 51-state list, with each state’s exemptions, is in workers’ comp requirements by state.

How a comp premium is built

Part Five of the policy says premium for each class is “a rate times a premium basis,” and that remuneration (payroll) is the most common basis⁠⁶. Pennsylvania’s rating bureau publishes the full calculation, in order, as a mandatory algorithm for policies effective from January 1, 2015⁠¹¹. Other states differ in detail, but the components are the same:

Source: PCRB Statistical Plan Manual, Section VII⁠¹¹.

Two policy rules matter most when the premium is audited:

1. Uninsured subcontractors count as your payroll

   The premium basis includes everyone whose work could make the insurer liable under Part One. If a sub has no payroll records, the insurer can use the contract price. The rule does not apply if you prove the sub’s employer had its own comp⁠⁶. This is what the premium audit checks.

2. The class on your information page is an estimate

   The policy says that if your actual work is not properly described by the classes listed, the insurer will assign the proper ones⁠⁶. See the class code guide.

Loss costs are not rates

In many states the rating bureau publishes loss costs: expected claim cost per $100 of payroll, with no insurer expenses or profit. Missouri’s regulator explains that each insurer then applies its own loss cost multiplier “based on the company’s own operating expenses, taxes and profit provision,” so rate = loss cost × LCM, and the same class can be priced differently by different insurers⁠¹².

That is why bureau figures and actual prices diverge. California’s benchmark of $1.65 per $100 of payroll, effective September 1, 2026, covers expected claims and claim-handling costs only⁠¹⁴⁠¹⁵. Yet insurers actually charged an average of $1.56 per $100 in 2025, all expenses included, about the same as the $1.55 benchmark for that period⁠¹⁴. Oregon publishes both numbers for 2026: the pure premium fell an average 3.3%, and the loaded figure that adds insurer expenses, profit and assessments is $0.87 per $100 of payroll, down from $0.91⁠¹⁶. Oregon then adds a 9.8% premium assessment to every insured employer’s premium, plus a Workers’ Benefit Fund assessment of 1.8 cents per hour worked, split between employer and employee⁠¹⁶.

Worked example: a Missouri employer (our calculation)

This shows the arithmetic, not a quote. The $3.00 rate, the mod and the credit are assumptions. The expense constant, terrorism charge and experience-rating threshold are values the Missouri Department of Commerce and Insurance lists⁠¹³.

1. Manual premium

   $250,000 of payroll in one class at an assumed insurer rate of $3.00 per $100: 2,500 × $3.00 = $7,500.00.

2. Experience mod

   Missouri lists eligibility for experience rating as at least $7,000 of premium in the last year or two of the experience period, or an average of $3,500 a year if more than two years⁠¹³. At an assumed mod of 0.85: $6,375.00.

3. Schedule credit

   An assumed 5% credit: $6,375.00 × 0.95 = $6,056.25.

4. Expense constant

   DCI lists $250⁠¹³: $6,306.25.

5. Premium discount

   Pennsylvania’s algorithm leaves the amount to each insurer, based on standard premium⁠¹¹. None is assumed here.

6. Terrorism

   DCI lists 0.013 for certified acts of terrorism. Applied per $100 of payroll, the method in Pennsylvania’s algorithm⁠¹¹⁠¹³, that is 2,500 × $0.013 = $32.50. Total: $6,338.75.

With a 1.00 mod and no credit, the same policy would cost $7,782.50. The mod and credit together save $1,443.75 (our calculation). The workers’ comp calculator runs these steps on your own payroll, and experience modification rate explains how the mod is calculated.

What the class does to the rate

The state funds in Ohio, Washington and Wyoming publish full rates, not loss costs. Compare an office, a carpentry or general building class, and a restaurant class in each:

Base rates set by the state fund before experience modification. Ohio and Wyoming charge per $100 of payroll; Washington charges per hour worked, and part is withheld from wages. Other states’ insurers file their own rates; see where rates are published.

In Ohio, carpentry NOC (5403) at $1.7131 per $100 is 37 times the clerical rate of $0.0466 (our calculation)⁠²². Washington charges per hour worked, not per $100 of payroll⁠²³, so its rates cannot be compared directly with Ohio’s. Full schedules are on the Ohio, Washington and Wyoming rate pages.

States where the state fund is the only seller

North Dakota, Ohio, Washington and Wyoming have exclusive state funds, and insured employers there buy comp from the fund at the fund’s rates. NASI notes that private insurers still pay some benefits in those states, for three reasons: federal Longshore Act coverage, liability coverage the state fund is not authorized to provide, and excess coverage⁠².

The state fund price works differently too. Ohio sets an experience-rated employer’s rate for each class as its experience modification times the class base rate⁠³⁰. Washington takes part of the premium from workers’ wages: L&I says employers pay about 75% and workers about 25%⁠¹⁹. In both states the published rate is the price itself, not a loss cost waiting for an insurer’s multiplier⁠²²⁠²³.

2026 rate decisions

A rate decision changes your premium at your next renewal on or after its effective date. Each is a statewide average. Your class can move more or less, and the figure type matters: a loss cost change moves the bureau’s base before any insurer’s multiplier.

Scroll the table sideways to see every column.

New York estimates the cut saves businesses more than $1 billion, an average of $1,779 per policyholder. Approved decreases there have averaged 10.3% a year over six years⁠¹⁷. California moved the other way. Its benchmark rose 6.6% from the revised $1.55, but by less than the 10.4% the rating bureau asked for⁠¹⁴. Earlier decisions in other states, plus filings in Michigan, Delaware and Massachusetts, are on the cost by state page.

The market: profitable, with prices still easing

NCCI reports a calendar-year 2025 combined ratio of 91% for workers’ comp, the 12th consecutive year of underwriting gains. The accident-year 2025 ratio, which counts only injuries in 2025, was 102%; the difference comes from continued downward development of reserves for earlier years⁠²⁵. NCCI also reports that net written premium fell 0.2% in 2025, lost-time claim frequency fell 2%, and medical and indemnity severity both rose 4%⁠²⁵. NAIC data put 2025 direct premium written at $57.7 billion in the states and territories, with a direct loss ratio of 49.1%⁠²⁸.

Renewal prices kept falling in mid-2026:

• CIAB (member brokers, average premium change at renewal, Q2 2026): workers’ comp −3.2%, against −0.3% for all lines⁠²⁶.
• Ivans (same-policy renewal rate change from agency-carrier data, Q2 2026): workers’ comp −1.37% ⁠²⁷.

CIAB: average premium change at renewal reported by member brokers, Q2 2026 (April 1-June 30, 2026), released 18 Aug 2026. Ivans: average renewal premium change on small commercial policies, Q2 2026. Premium changes include changes in exposure as well as rates. All series and method.

NCCI estimates the industry’s reserves are $14 billion redundant⁠²⁵. The cuts are not universal: in California the regulator’s own analysis indicated a 6.6% increase for September 2026⁠¹⁴.

What lowers a comp premium

• Check every class code against the work. The rate attaches to the class, and the policy lets the insurer reassign classes that do not fit⁠⁶. In Ohio, office payroll misfiled as carpentry costs 37 times as much per $100⁠²².
• Collect certificates from subcontractors. Without proof that a sub’s employer had comp, the sub’s payroll, or its contract price, can be added to yours at audit⁠⁶.
• Track your experience mod. It multiplies most of the premium. Missouri’s eligibility threshold means very small employers are not experience-rated at all⁠¹³.
• Ask which state credits exist. Pennsylvania’s algorithm has lines for a certified safety committee credit, a drug-free workplace credit and a deductible credit⁠¹¹. Ask your insurer which equivalents your state’s rules allow and what qualifies.
• Do not overbuy employer’s liability. Buy the Part Two limit your contracts require, such as California’s $1 million⁠⁷; each increase above the standard limit is a separate charge⁠¹¹.
• Expect assessments you cannot shop away. Oregon’s 9.8% assessment and Pennsylvania’s Act 57 assessment apply whichever insurer you choose⁠¹¹⁠¹⁶.

Sources

1. 1
   U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released Sept. 9, 2026) Checked 13 Oct 2026 · Back to text ↑
2. 2
   National Academy of Social Insurance, Workers’ Compensation: Benefits, Costs, and Coverage, 2023 Data (Aug. 11, 2026) Checked 13 Oct 2026 · Back to text ↑
3. 3
   Oregon Department of Consumer and Business Services, 2024 Oregon Workers’ Compensation Premium Rate Ranking Checked 13 Oct 2026 · Back to text ↑
4. 4
   Insureon, How much does workers’ compensation insurance cost? (updated April 13, 2026) Checked 13 Oct 2026 · Back to text ↑
5. 5
   ERGO NEXT, How much does workers’ comp insurance cost? (data updated April 2026) Checked 13 Oct 2026 · Back to text ↑
6. 6
   NCCI (copy hosted by the North Carolina Rate Bureau), Workers Compensation and Employers Liability Insurance Policy, WC 00 00 00 C (Ed. 1-15) Checked 13 Oct 2026 · Back to text ↑
7. 7
   California Department of General Services, Contract Insurance Requirements: when doing business with California state government Checked 13 Oct 2026 · Back to text ↑
8. 8
   California Division of Workers’ Compensation, Employer information Checked 13 Oct 2026 · Back to text ↑
9. 9
   Florida Legislature, Florida Statutes § 440.02, Definitions Checked 13 Oct 2026 · Back to text ↑
10. 10
    Texas Legislature, Texas Labor Code, Chapter 406 (§§ 406.002, 406.033) Checked 13 Oct 2026 · Back to text ↑
11. 11
    Pennsylvania Compensation Rating Bureau, Statistical Plan Manual, Section VII: Premium Algorithm Checked 13 Oct 2026 · Back to text ↑
12. 12
    Missouri Department of Commerce and Insurance, Loss cost multipliers Checked 13 Oct 2026 · Back to text ↑
13. 13
    Missouri Department of Commerce and Insurance, Workers’ compensation miscellaneous values Checked 13 Oct 2026 · Back to text ↑
14. 14
    California Department of Insurance, Proposed Decision: September 1, 2026 Claims Cost Benchmark and Pure Premium Rates Checked 13 Oct 2026 · Back to text ↑
15. 15
    California Department of Insurance, Decision and Order: September 1, 2026 Workers’ Compensation Claims Cost Benchmark Checked 13 Oct 2026 · Back to text ↑
16. 16
    Oregon Department of Consumer and Business Services, Workers’ compensation pure premium rate to drop for 13th-straight year Checked 13 Oct 2026 · Back to text ↑
17. 17
    New York State Department of Financial Services, Press release, July 15, 2026: 22 percent reduction in workers’ compensation premium rates Checked 13 Oct 2026 · Back to text ↑
18. 18
    Florida Office of Insurance Regulation, Commissioner approves 6.9% rate decrease for Florida workers’ compensation policies (Nov. 17, 2025) Checked 13 Oct 2026 · Back to text ↑
19. 19
    Washington State Department of Labor & Industries, Washington workers’ comp insurance average premium will rise about 4.9% in 2026 (Nov. 26, 2025) Checked 13 Oct 2026 · Back to text ↑
20. 20
    Ohio Bureau of Workers’ Compensation, Ohio employers save $10 million with new rate cut (Feb. 27, 2026) Checked 13 Oct 2026 · Back to text ↑
21. 21
    Minnesota Workers’ Compensation Insurers Association, Circular Letter 26-1880: Assigned Risk Plan rates effective January 1, 2027 Checked 13 Oct 2026 · Back to text ↑
22. 22
    Ohio Bureau of Workers’ Compensation, Base rates effective July 1, 2026 (Ohio Administrative Code 4123-17-06) Checked 13 Oct 2026 · Back to text ↑
23. 23
    Washington State Department of Labor & Industries, 2026 Hourly Rates by Risk Classification Code and Fund Checked 13 Oct 2026 · Back to text ↑
24. 24
    Wyoming Department of Workforce Services, Workers’ compensation 2026 industry base rates Checked 13 Oct 2026 · Back to text ↑
25. 25
    National Council on Compensation Insurance (NCCI), State of the Line Report 2026 Checked 13 Oct 2026 · Back to text ↑
26. 26
    The Council of Insurance Agents & Brokers (CIAB), Commercial Property/Casualty Market Index, Q2 2026 Checked 13 Oct 2026 · Back to text ↑
27. 27
    Ivans (Applied Systems), Ivans Index Q2 2026 results released Checked 13 Oct 2026 · Back to text ↑
28. 28
    National Association of Insurance Commissioners (NAIC), 2025 Market Share Reports for Property/Casualty Groups and Companies Checked 13 Oct 2026 · Back to text ↑
29. 29
    City of San Diego, Purchasing & Contracting Insurance Checklist (rev. Jan. 6, 2017) Checked 13 Oct 2026 · Back to text ↑
30. 30
    Ohio Bureau of Workers’ Compensation, Ohio Administrative Code 4123-17-03: Experience rating Checked 13 Oct 2026 · Back to text ↑

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