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New York business insurance: requirements and costs

New York requires workers' comp from an employer's first employee, and it also makes you carry Disability Benefits Law coverage and a Paid Family Leave rider.⁠3⁠6 The Department of Financial Services (DFS) approved an average 22% reduction in workers' comp premium rates effective October 1, 2026, after the rating board filed for a 21.9% loss cost decrease.⁠1⁠2 Even so, Oregon's 2024 ranking put New York third most expensive of 51 jurisdictions.⁠11

Checked against 13 sources Last reviewed How we check figures

New York at a glance

Workers’ comp required1+ employee (nearly all employers; farms and 40+ hr/week domestic workers included)
Where employers buy itPrivate insurers and a competitive state fund (New York State Insurance Fund (NYSIF))
Rates set byNew York Compensation Insurance Rating Board
Employer comp cost, 2023$1.12 per $100 of covered wages (US $0.98)
Comp rate index, 2024$1.98, ranked 3 of 51 (1 = most expensive)
Employer health premium, 2025$10,913 single, $29,752 family (average total premium)
Auto liability minimum25/50/10
Payroll insurance programsDisability Benefits Law (DBL); Paid Family Leave (PFL)

The New York Compensation Insurance Rating Board (NYCIRB) files loss costs, and DFS reviews and approves them. Insurers then apply their own multipliers, so prices still differ between carriers.⁠1⁠2 The Board of Governors voted on May 7, 2026 to file a 21.9% decrease in the overall loss cost level, effective October 1, 2026.⁠2 On July 15, 2026 the Governor announced that DFS had approved the reduction, describing it as an average 22% cut in premium rates, an estimated saving of more than $1 billion or $1,779 per policyholder.⁠1 The announcement says approved decreases have averaged 10.3% a year over six years, and credits fewer lost-time claims.⁠1 Our calculation shows the scale: a policy that cost $20,000 and moved exactly with the average, with no change in payroll or experience modification, would cost about $15,600. Your class and mod can move differently, and the cut applies from the effective date of each policy.

You can buy comp from a private carrier or from the New York State Insurance Fund (NYSIF), the state's public carrier. NYSIF must insure any employer seeking coverage, whatever its business, safety record or size, but can deny one that owes it money from a previous account.⁠5 That makes NYSIF the insurer of last resort. Employers can also apply to self-insure, and NYSIF safety groups give members an advance discount and a dividend based on the group's safety performance.⁠5⁠6 The state adds an employer assessment to premium, which the Workers' Compensation Board sets by dividing its estimated annual expenses by estimated statewide premium. The governor's office says the rate has fallen 37.5% since 2021.⁠1

The official cost data shows the same pattern of decline from a higher base. NASI estimates that New York employers spent $1.12 per $100 of covered wages on comp in 2023, down from $1.44 in 2019, a 22% fall by our calculation, against a 16% fall nationally to $0.98.⁠10 Oregon's index, based on manual rates in effect January 1, 2024, was $1.98 per $100 of payroll for New York, 182% of the median state, behind only Hawaii and New Jersey.⁠11 That predates the October 2026 cut. Health benefits are expensive too. AHRQ's 2025 survey found 39.3% of private-sector establishments in firms with fewer than 50 employees offered coverage, against 32.1% nationally. Where they did, the average single premium was $11,804, about 31% above the $9,034 small-firm national figure by our calculation, and the employee's share averaged $2,885, against $1,924.⁠12

Three New York rules change what a small employer carries. First, the Disability Benefits Law requires coverage for off-the-job injury and illness, and Paid Family Leave is added to that policy, typically as a rider.⁠6 Second, auto liability and No-Fault coverage must come from a New York-issued policy.⁠8 Third, the Construction Industry Fair Play Act presumes a worker injured while performing services for a contractor is the contractor's employee, so misclassifying crews becomes a comp premium and penalty issue.⁠3

Workers’ compensation in New York

Virtually all New York employers must carry workers' comp for their employees under Workers' Compensation Law sections 2 and 3, with no minimum headcount.⁠3 Farms with employees must cover them. Households must cover domestic workers employed 40 or more hours a week by the same employer.⁠3 Out-of-state employers need a full New York policy, with New York listed in Item 3A of the information page, if they must register for New York unemployment insurance, have a permanent location or employees based in New York, work under a New York permit or contract, or do construction work in the state.⁠3 They also need one if employees were in New York at least 40 hours a week for more than two consecutive weeks, or for 25 or more employee-days, in the previous year.⁠3

Who is exempt

  • Sole proprietors without employees (may voluntarily cover themselves)⁠3
  • One- or two-person corporations where those individuals own all the stock and hold all the offices; coverage is required with more than two officers or shareholders⁠3
  • Domestic workers employed under 40 hours a week by the household who do not live on the premises⁠3
  • A farmer's spouse and minor children under 18, if not under an express contract of hire⁠3
  • Members of supervised nonprofit amateur athletic activities, if not otherwise employed (WCL section 3, Group 18)⁠3

Buying coverage and who sets the rates

Buy from a private insurer authorized by DFS or from NYSIF, which must write any employer that applies, or apply to self-insure.⁠5 NYSIF owes no obligation to employers that owe it money from a previous account.⁠5

Latest rate decision (1 Oct 2026): DFS approved an average 22% reduction in workers' comp premium rates effective Oct. 1, 2026, announced July 15, 2026. NYCIRB had filed a 21.9% decrease in the overall loss cost level. Official notice.

Employers may apply to self-insure workers' compensation, disability and Paid Family Leave benefits. If approved, they must meet all Board obligations and maintain an adequate security deposit.⁠5⁠6

Penalties for going without

The Board can assess up to $2,000 for each 10-day period without coverage, or up to two times the cost of compensation for the period.⁠4 Failure to cover five or fewer employees within 12 months is a misdemeanor with a $1,000 to $5,000 fine. More than five is a class E felony with a $5,000 to $50,000 fine, and a repeat conviction within five years is a class D felony with a $10,000 to $50,000 fine.⁠4 The Board can issue a stop-work order, and violators are barred from state public-works bidding for one year after a misdemeanor or civil penalty.⁠4

What New York employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearNew YorkUnited States
2019$1.44$1.17
2020$1.30$1.08
2021$1.15$1.01
2022$1.17$1.00
2023$1.12$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts New York’s index for rates in effect on 1 January 2024 at $1.98 per $100 of payroll, 82% above the national median of $1.09 (rank 3 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Disability and paid leave insurance

New York runs 2 payroll-funded programs that employers must register for, fund or insure on top of workers’ compensation.

New York disability and paid leave programs, 2026
Program2026 contributionEmployer’s part
Disability Benefits Law (DBL)Employee contribution up to 0.5% of wages, capped at $0.60 a week; employer premium set by carrierThe employer must provide coverage through an authorized carrier, NYSIF or self-insurance. It may, but need not, collect the employee contribution, and pays the rest.⁠6
Paid Family Leave (PFL)0.432% of gross wages in 2026, maximum $411.91 a year, paid by the employee if the employer deducts it.⁠13Coverage is typically a rider on the DBL policy; the employer may fund it through employee payroll deductions rather than pay the premium itself.⁠6⁠7

Pays weekly cash benefits for off-the-job injury or illness. Employees cannot waive it.⁠6

Up to 12 weeks at 67% of average weekly wage, capped at $1,228.53 a week in 2026.⁠7

Employer health insurance in New York

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureNew YorkFirms under 50United States
Single coverage, total premium$10,913$11,804$9,025
Family coverage, total premium$29,752$30,351$26,281
Employee share, single$2,231–$1,817
Employers offering coverage51.0%39.3%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in New York

Every vehicle registered in New York, including business vehicles, must carry at least 25/50/10 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Most vehicles need $25,000 bodily injury and $50,000 death per person, $50,000 bodily injury and $100,000 death for two or more people, and $10,000 property damage.⁠8 Basic No-Fault (PIP) of $50,000 and uninsured motorists coverage are also required under DFS guidance.⁠9 The policy must be New York-issued, as DMV does not accept out-of-state insurance.⁠8 Commercial and for-hire vehicle limits can differ and are not covered here.

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Other New York rules that affect insurance costs

Misclassified construction crews count as employees

Under the Construction Industry Fair Play Act, a worker injured on or after October 26, 2010 while performing services for a contractor is presumed to be the contractor's employee for comp, disability and Paid Family Leave.⁠3 An individual is an independent contractor only if the employer proves three criteria, or the entity meets all twelve of the Act's tests.⁠3 Misclassifying can bring civil penalties of up to $2,500 per worker for a first violation and up to $5,000 for a second within five years.⁠4

General contractors are charged for uncovered subs

The Board says it often finds individuals called subcontractors to be employees of the general contractor, so carriers often assess general contractors premium for all subcontractors unless they show their own comp policy.⁠3

New York compared with its neighbors

Workers’ comp and health insurance costs, New York and neighboring states
New York$1.12$1.98$10,913
New Jersey$1.27$2.16$9,743
Pennsylvania$1.08$1.14$9,421
Connecticut$0.92$1.48$9,987
Vermont$1.24$1.60$10,004
Massachusetts$0.65$0.97$10,436

Sources

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  12. 12
  13. 13

National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

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Other states

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