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Pennsylvania business insurance: requirements and costs

Pennsylvania sets workers' comp prices in two steps. The Pennsylvania Compensation Rating Bureau (PCRB) files loss costs, and each insurer files its own multiplier on top of them. The Insurance Department approved a 1.22% average loss-cost decrease for policies issued on or after April 1, 2026, following an 8.67% decrease in 2025.⁠1⁠3 Coverage is required from the first employee, including part-time workers and family members, unless every worker falls in a narrow excluded category, and the State Workers' Insurance Fund (SWIF) competes with private insurers.⁠4⁠6

Checked against 12 sources Last reviewed How we check figures

Pennsylvania at a glance

Workers’ comp required1+ employee, including part-time and family members
Where employers buy itPrivate insurers and a competitive state fund (State Workers' Insurance Fund (SWIF))
Rates set byPennsylvania Compensation Rating Bureau
Employer comp cost, 2023$1.08 per $100 of covered wages (US $0.98)
Comp rate index, 2024$1.14, ranked 21 of 51 (1 = most expensive)
Employer health premium, 2025$9,421 single, $26,623 family (average total premium)
Auto liability minimum15/30/5

Pennsylvania is a loss-cost state, not an administered-rate state. PCRB, which the Insurance Department describes as an independent bureau filing on behalf of the insurers that write comp, submits loss costs by classification. Its filing for April 1, 2026 was designated Proposal C-387 and submitted on November 24, 2025.⁠1⁠2 Insurers then apply their own loss cost multipliers, so two carriers can quote different prices for the same class. The department says the effect on an individual employer depends on its classification, its claims experience and its insurer.⁠1 That is why the 1.22% average is a starting point rather than a forecast for your renewal. Our calculation: $20,000 of premium moved exactly 1.22% would fall to about $19,756, and loss costs are only one input to premium. The department also notes that employers with a certified workplace safety committee get a further 5% discount on comp premium.⁠9

Two buying routes sit outside the voluntary insurer market. Employers can self-insure, individually or as a group, with Labor & Industry approval.⁠4⁠6 They can also buy from SWIF, a state agency that L&I says is required to provide coverage to all businesses, especially those having difficulty getting it from private insurers.⁠6 We did not confirm from a statute whether SWIF is formally the insurer of last resort, so the page does not call it that.

Against the national data, Pennsylvania sits a little above the middle on manual rates and has fallen more slowly than the nation. NASI estimates employers spent $1.08 per $100 of covered wages in 2023, down from $1.26 in 2019, a drop of about 14.5% by our calculation. The US figure fell about 16.3%, from $1.17 to $0.98, which leaves Pennsylvania about 10% above it.⁠10 Oregon's ranking of rates in effect January 1, 2024 puts Pennsylvania 21st most expensive of 51 jurisdictions at an index of $1.14 per $100 of payroll, 105% of the median. That is well below New Jersey ($2.16, second highest) and New York ($1.98), and above Delaware ($0.97), Maryland ($0.89), Ohio ($0.68) and West Virginia ($0.54).⁠11 Those rankings predate the 2025 and 2026 decreases, and a 2025 cut and a 2026 cut together compound to about 9.8% on loss costs by our calculation (0.9133 x 0.9878).⁠1⁠3 Health benefits are thinner than average among small employers: AHRQ's 2025 survey found 30.0% of Pennsylvania private-sector establishments in firms with fewer than 50 employees offered health insurance, against 32.1% nationally. Their average single premium was $8,554 against $9,034 nationally, about 5% lower by our calculation.⁠12

For auto, Pennsylvania requires first-party medical benefits as well as liability, and the Insurance Department's minimums have not changed in the sources we checked.⁠7 Construction is the trade where Pennsylvania law most changes who you can treat as a contractor, which is covered in the notes below. This page does not cover commercial-vehicle limits set by the Public Utility Commission or federal rules, which we did not research.

Workers’ compensation in Pennsylvania

Any employer with at least one employee who could be injured or develop a work-related disease in Pennsylvania must insure its comp liability, even if the workers are part-time or family members such as a spouse or children. The only way out is that every employee falls in an excluded category.⁠4

Who is exempt

  • Federal workers, longshoremen and railroad workers
  • Persons working out of their own homes or other premises not under the employer's control who make up, clean, repair or finish articles given to them for sale
  • Casual workers whose employment is casual and not in the regular course of the employer's business
  • Agricultural laborers earning under $1,200 per person per calendar year, if none works 30 or more days in the year (family-member labor has its own conditions)
  • Domestic workers, unless the employer elects coverage
  • Sole proprietors and general partners
  • Employees of a religious sect that conscientiously opposes insurance benefits, after L&I grants an exemption
  • Executive officers excluded with L&I approval: unpaid officers of a non-profit, S-corporation officers with an ownership interest, and C-corporation officers with at least a 5% interest
  • Licensed real estate salespersons and insurance agents paid on commission only under a written agreement and qualifying as independent contractors

Buying coverage and who sets the rates

Buy from a licensed insurer, from the State Workers' Insurance Fund (SWIF), or by getting L&I approval to self-insure individually or as a group.⁠4⁠6 Insurers price off PCRB loss costs with their own filed multipliers.⁠1

Latest rate decision (1 Apr 2026): Insurance Department approved PCRB Proposal C-387: an average 1.22% decrease in workers' comp loss costs for new and renewal policies issued on or after April 1, 2026. The prior year's filing was an 8.67% decrease. Official notice.

Employers can self-insure individually or as a group by getting approval from the Department of Labor & Industry.⁠4⁠6

Penalties for going without

Each day without required coverage is a separate offense. A misdemeanor conviction can bring a $2,500 fine and up to one year in prison per day, and an intentional violation is a felony with up to a $15,000 fine and up to seven years per day. The employer and the individuals responsible for it can each be charged.⁠5 L&I can also assess $200 a day, up to 30 days, if you fail to answer its request for coverage information.⁠5

What Pennsylvania employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearPennsylvaniaUnited States
2019$1.26$1.17
2020$1.18$1.08
2021$1.11$1.01
2022$1.10$1.00
2023$1.08$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 Pennsylvania’s index for rates in effect on 1 January 2024 at $1.14 per $100 of payroll, 5% above the national median of $1.09 (rank 21 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.

Employer health insurance in Pennsylvania

Average annual premium per enrolled employee at private-sector employers, 2025
MeasurePennsylvaniaFirms under 50United States
Single coverage, total premium$9,421$8,554$9,025
Family coverage, total premium$26,623$24,389$26,281
Employee share, single$1,669–$1,817
Employers offering coverage47.0%30.0%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 Pennsylvania

Every vehicle registered in Pennsylvania, including business vehicles, must carry at least 15/30/5 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

Also required: $5,000 of first-party medical benefits. A $35,000 combined single limit for bodily injury and property damage satisfies the liability minimums. We found no 2025-2026 change on the Insurance Department page.⁠7

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 Pennsylvania rules that affect insurance costs

Construction workers are presumed to be employees

Under the Construction Workplace Misclassification Act (Act 72), a construction worker is an independent contractor only with a written contract, freedom from the contractor's control, and a customarily independent trade or business. One of the six factors for the last test is carrying at least $50,000 of liability insurance.⁠8 A worker who fails the test is an employee, so the contractor needs comp coverage for them.⁠4⁠8

Certified safety committee discount

Employers that certify a workplace safety committee with L&I receive a further 5% discount on comp premium, according to the Insurance Department and L&I.⁠9

Pennsylvania compared with its neighbors

Workers’ comp and health insurance costs, Pennsylvania and neighboring states
Pennsylvania$1.08$1.14$9,421
New York$1.12$1.98$10,913
New Jersey$1.27$2.16$9,743
Delaware$0.88$0.97$9,459
Maryland$0.74$0.89$8,760
West Virginia$1.05$0.54$8,878
Ohio$0.58$0.68$8,804

Sources

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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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