How much does workers’ compensation insurance cost?

There isn’t a one-size-fits-all price for workers’ compensation coverage. Generally, providers begin with a base rate—for example, around $0.30 per $100 of payroll. Using that calculation, if an employee earns $40,000 annually, the starting premium for that employee would be about $120 per year.

From there, providers apply various modifiers based on your company’s risk profile. Businesses in high-risk industries such as construction or logging will typically pay higher rates than those in lower-risk fields, such as retail. State-specific rules and requirements also play a major role in determining premiums.

For a more detailed breakdown, read our workers’ compensation 101 guide.

Several elements influence how much your workers’ comp. policy costs:

• Worker classification: Employees who have riskier jobs, such as electricians, roofers, or machine operators, are assigned higher base rates.

• Industry rates: Companies in industries with a higher likelihood of workplace injuries generally pay more.

• Claims history: If your company sees frequent or severe claims, your premiums will likely rise.

• State requirements: Some states operate monopolistic funds or set strict requirements, both of which can impact costs.

• Policy type: Traditional policies, state funds, or self-insured options each come with different cost structures.

While some factors are out of your control, there are ways to help lower your workers’ compensation expenses:

• Build a safety program: Structured training, monitoring, and reporting can reduce accidents and claims. Learn more about how you can reduce workplace risks.

• Foster a culture of safety: When leadership prioritizes safety at all levels, employees are more likely to follow best practices.

• Hire smart: Bringing on qualified employees reduces the risk of accidents.

• Train effectively: Proper training in equipment and procedures can help reduce workplace injury risks.

• Establish a return-to-work program: Light-duty or transitional roles can help employees recover while staying engaged, often reducing claim severity and costs.

Green Bay Packaging operates 40 facilities across 16 states and employs more than 4,500 workers. For more than a decade, they’ve trusted Sentry to help them manage claims, reduce risk, and protect their employees. See how this manufacturer manages workers’ compensation costs with Sentry.

During the underwriting process, insurers will evaluate your risk exposure. If your risk is unclear or not well-documented, providers may assume higher exposure and set higher premiums. That’s why it’s important to classify workers correctly and maintain accurate records.

At Sentry, we believe in building relationships to understand your business goals and risks. The more we learn about your operations, the more options we can provide to help manage your workers’ compensation coverage.