Workers compensation insurance cost is a necessary coverage liability for employers and employees in the likelihood of an unfortunate accident. Workers compensation insurance pays the employees in case they are harmed or become ill from working or while at the work place. Workers will be paid for the cost resulting from the injury including medical fees and compensation for lost hours. By having workers compensation insurance the employer is absolved from being sued in litigation from the employee if such an incident were to occur. The base rate for workers compensation does vary depending on the state the business is located in, but the methods for calculating the rates are the same among the different states and insurers.

The price of workers compensation insurance is a combination of the base rate mandated by the state and the rate offered by the insurance company for the business. The base rate for the workers compensation insurance cost is one percent of the employee salary multiplied by a rate of every $100 that is determined based on the risk factors the state views related to the employee’s particular job. A relatively safe job may have base cost of $1.15 per $100 of the employee’s salary; if the employee’s salary is $450 per week than the base rate cost here would be $5.18 per week.

Each state establishes their own rate system according to the occupation and the conditions for the particular state. The riskier the job, the more likely the chance of injury, the higher the base rate for that job will be; an office worker will have a lower rate than a construction worker or tree climber. Each employed person will have a base rate; the employer must also consider the insurer premium aside from the state rate. A small business may pay a few thousand dollars a year for a few employees; larger businesses with 20 employees should expect to pay close to $10,000 or more each year.

The insurers provide premiums to the employer based on several different calculated factors. The company history of incidents or claims is going to be significant in determining the compensation insurance cost. Many insurers offer employers various discounts and deductibles to help reduce the price of workers compensation insurance. Many insurers will offer employers discounts for work safety programs and having a drug free workplace; there may be additional discounts for employers that provide health insurance for the workers as well. The workers compensation rates available will vary with each insurer and the state that the business operates in; the rate will typically last for three years and then will be reassessed based on the company’s compliance history and claims.

Employers should take workers compensation very seriously; this is a necessary liability expense and it is very easy to over pay an insurer. It is equally as easy to save money with the right insurer taking advantage of discounts and deductibles. Searching for worker’s compensation insurance is very similar to searching for any other types of insurance. There are factors to consider aside from price when choosing an insurer; discretion and doing the due diligence always pays dividends in the long term. The calculated workers compensation cost can be daunting and unexpected for many entrepreneurs; balancing this cost causes many employers to reassess their business modal more often than not.

Finding the right insurer that is experienced in the industry, having access to experienced claim adjusters for the industry and having options with discounts and deductibles are equally important as the premium offered by the insurer. Having a low rate and premium is important, having a dependable insurance company when the incident occurs is more important. The cost of workers’ compensation will depend on the commitment of the employer to find the best insurer and rate available for the state the business operates in. The nature of the work and the available discounts from the insurer will also determine the cost. It is important for employers to remember that each state mandates workers compensation individually; the rates, as well as the regulations and coverages will vary with each state.