Quick Answer:
Workers’ compensation insurance can be obtained from licensed insurance companies, commercial insurance brokers, online insurance marketplaces, and specialty business insurance companies. A few of the commonly used carriers include: The Hartford, Travelers, biBERK, Next Insurance, and State Farm. Your best choice will depend on the size of your company, the risks in your industry, the number of employees, and the regulations in your state.
Do you have employees working for your business and wonder, “Where can I get workers’ compensation insurance?”
Workers’ compensation insurance can be purchased from insurance carriers, independent agents, online business insurance agencies, and in some cases through state workers’ compensation funds.
But purchasing the least expensive coverage may not always be the best choice to meet your employees’ needs and your state’s legal requirements. Workers’ compensation insurance provides medical and financial support to your employees for injuries or illness and covers death benefits and medical and rehabilitative care. The coverage also protects employers from legal actions and the associated expenses of workers’ compensation claims.
Here, we’ll explain where you can purchase workers’ compensation insurance, how workers’ compensation insurance works, who should purchase this coverage, and provide an outline of workers’ compensation coverage options, cost, and how to select an adequate policy for your business.
What is Workers’ Compensation Insurance?
Workers’ compensation is business insurance that covers expenses an employer will owe employees injured or killed, disabled, or who become sick at the workplace.
Generally, by accepting workers’ comp benefits, employees waive their rights to sue the employer for workplace injuries.
A workers’ compensation policy may cover:
- Medical expenses
- Hospitalization costs
- Rehabilitation expenses
- Lost wages during recovery
- Permanent disability benefits
- Temporary disability benefits
- Death benefits for dependents
- Employer legal liability
For employers, it serves as both employee protection and financial risk management.
Where Can You Buy Workers’ Compensation Insurance?
There are several places where businesses can obtain workers’ compensation coverage.
| Provider | Best For | Pros | Cons |
|---|---|---|---|
| Insurance Companies | Medium & Large Businesses | Customized coverage | Higher comparison effort |
| Insurance Brokers | Small Businesses | Compare multiple insurers | Broker fees may apply |
| Online Providers | Startups | Fast quotes | Limited customization |
| State Funds | High-risk industries | Guaranteed availability | State-specific |
| PEOs | Growing companies | HR + Insurance | Service fees |
1. Directly From Insurance Companies
Many major commercial insurance carriers sell workers’ compensation policies directly to businesses.
Popular providers include The Hartford, Travelers, Nationwide, State Farm, Farmers Insurance, and Liberty Mutual. When comparing these companies, businesses should evaluate coverage options, claims handling efficiency, pricing, industry expertise, and customer service to find the policy that best meets their needs.
Best For:
- Established businesses
- Companies with multiple employees
- Businesses needing customized policies
2. Through Independent Insurance Brokers
An experienced insurance broker can compare policies from several insurers, helping you find the right balance between coverage and price without contacting each company yourself. It’s much easier to find one that works for you by letting your broker do the comparison shopping on your behalf.
Comparing multiple insurers on your own can take time, so many businesses choose brokers who can obtain several quotes in one place.
Benefits:
- Access to multiple insurance companies
- Expert advice
- Assistance with claims
- Policy comparison support
Best For:
- Small businesses
- First-time business owners
- Companies seeking personalized guidance
3. Online Business Insurance Platforms
Businesses looking for a fast and convenient way to purchase workers’ compensation insurance can explore online providers such as Next Insurance, biBERK, Simply Business, CoverWallet, and Insureon. These platforms simplify the quote comparison process, making it easier for employers to find coverage options that match their industry, workforce size, and budget.
Many businesses can receive quotes within minutes and purchase coverage online.
Best For:
- Startups
- Freelancers with employees
- Small businesses seeking convenience
4. State Workers’ Compensation Insurance Funds
Some states operate their own workers’ compensation insurance funds, offering coverage to businesses that cannot easily obtain policies from private insurers.
Examples include:
- California State Compensation Insurance Fund
- New York State Insurance Fund
- Texas Mutual Insurance Company
Best For:
- High-risk industries
- Businesses denied private coverage
- Employers with prior claims history
5. Professional Employer Organizations (PEOs)
PEO may offer workers’ comp as part of a larger HR/payroll service. PEOs often have group purchasing power to obtain competitive rates.
Best For:
- Growing businesses
- Companies outsourcing HR functions
- Businesses with 10+ employees
Who Needs Workers’ Compensation Insurance?
Most states require businesses with employees to carry workers’ compensation insurance.
Workers’ compensation insurance is especially important for industries where employees face higher risks of workplace injuries. Sectors such as construction, manufacturing, transportation, warehousing, retail, hospitality, healthcare, landscaping, and agriculture commonly require coverage to protect both workers and employers from the financial impact of work-related accidents and illnesses.
The U.S. Department of Labor’s workers’ compensation resources provide helpful information on state programs and employer responsibilities.
State Requirements May Differ
Workers’ compensation laws vary by state. Some states require coverage when a business hires its first employee, while others have different employee thresholds or exemptions. Before purchasing a policy, employers should verify their state’s requirements to remain compliant.
Why is Workers’ Compensation Insurance Important?
Workers’ compensation insurance protects both employees and employers.
Legal Compliance
In most states, employers are legally required to maintain workers’ compensation insurance for their employees. Failing to carry the required coverage can lead to serious consequences, including substantial fines, regulatory penalties, business license suspension, and costly lawsuits. Maintaining a compliant workers’ compensation insurance policy helps businesses meet state regulations while protecting both employers and employees in the event of a workplace injury or illness.
Employee Protection
When an employee suffers a work-related injury or illness, workers’ compensation insurance helps provide financial security during the recovery process. The policy covers the cost of necessary medical treatment, ensuring injured workers receive proper care without facing a significant financial burden. In addition, employees may receive wage replacement benefits if they are unable to work while recovering. For injuries that result in temporary or permanent disabilities, workers’ compensation insurance can also provide disability compensation, helping workers maintain financial stability and focus on their recovery.
Business Protection
Without insurance, the employer would need to cover these costs of injury themselves.
A severe injury can result in costs running to tens or hundreds of thousands of dollars. Similar financial risks exist for property owners who don’t have adequate business or property insurance protection.
What Does Workers Compensation Insurance Cover?
| Coverage Type | What It Covers |
| Work Injuries | Covers injuries that occur while performing job-related duties, including falls, machinery accidents, slip-and-fall incidents, and burns. |
| Medical Expenses | Pays for emergency treatment, hospital stays, surgeries, medications, physical therapy, and other necessary medical care. |
| Temporary Disability Benefits | Provides wage replacement when an employee is unable to work for a temporary period due to a workplace injury. |
| Permanent Partial Disability | Offers compensation when an injury results in a lasting impairment, but the employee can still perform some work. |
| Permanent Total Disability | Provides benefits when a workplace injury permanently prevents an employee from returning to work. |
| Death Benefits | Provides financial assistance to surviving dependents following a fatal work-related accident or illness. |
What Is Not Covered by Workers Compensation Insurance?
- Although workers’ compensation insurance covers most work-related injuries and illnesses, some situations are typically excluded from coverage.
- Claims involving intentionally self-inflicted injuries, criminal activities, or injuries caused by intoxication are generally not covered under standard policies.
- Similarly, injuries that occur outside an employee’s job responsibilities or while violating company safety rules may also be denied.
- Since coverage exclusions vary by insurer and state regulations, employers should carefully review their policy terms to understand what is and is not covered.
Types of Workers Compensation Policies
Workers’ compensation insurance policies are generally available in different formats to suit various business needs.
- A Named Employee Policy covers only the specific employees listed in the policy, making it a suitable option for small businesses with limited staff or specialized workers.
- In contrast, an Unnamed Employee Policy automatically covers eligible employees without requiring each individual to be listed. This type of coverage is often preferred by seasonal businesses, companies with contract workers, and industries that experience high employee turnover.
How Much Does Workers’ Compensation Insurance Cost?
The cost of workers’ compensation insurance varies from one business to another and is influenced by several key factors. Insurance providers typically assess the industry’s risk level, the number of employees, and the company’s total payroll when calculating premiums.
A business’s claims history can also impact costs, as frequent claims may lead to higher rates. Additionally, factors such as business location and employee job classifications play an important role in determining the overall cost of workers’ compensation insurance coverage.
For example:
| Business Type | Typical Monthly Cost |
| Office-Based Business | $20–$100 |
| Retail Store | $50–$300 |
| Manufacturing Company | $300–$2,000+ |
| Construction Company | $500–$5,000+ |
In reality, costs are highly variable from state to state and insurer to insurer.
Selecting the Best Workers’ Compensation Insurance Provider
When comparing workers’ compensation insurance providers, focus on factors such as financial strength, industry expertise, claims handling, and customer support. A reliable insurer should offer strong coverage options, efficient claims processing, and responsive assistance when workplace accidents occur.
Businesses may also benefit from additional protections, including employer liability coverage and occupational disease benefits. Employers should also prioritize workplace safety to reduce claims and create a safer work environment by following OSHA workplace safety guidelines.
How to Buy Workers’ Compensation Insurance
Buying workers’ compensation insurance is generally a simple process if you have your payroll and employee information ready.
Step 1: Gather Business Information
Prepare:
- Employee count
- Payroll records
- Business classification
- Claims history
Step 2: Compare Quotes
Compare quotes from multiple providers, review their financial strength, and check independent customer reviews before making a decision.
Step 3: Review Coverage
Evaluate:
- Coverage limits
- Exclusions
- Endorsements
- Premium costs
Step 4: Purchase the Policy
- Complete the application and pay the premium.
- Coverage can often begin immediately.
Common Mistakes to Avoid When Purchasing Workers’ Compensation Insurance
- When searching for workers’ compensation insurance, many business owners make the mistake of choosing a policy based solely on price. While affordability matters, the cheapest policy may not provide the coverage your business actually needs.
- Another common issue is underreporting payroll to reduce premiums. This can lead to penalties, audits, and unexpected costs if a claim is filed.
- Business owners should also pay close attention to policy exclusions. Failing to review what is and isn’t covered can leave employees and employers exposed to financial risks.
- It’s equally important to update employee counts regularly. Workforce changes can affect your coverage requirements, and inaccurate information may result in inadequate protection.
- Finally, avoid the mistake of skipping annual coverage reviews. As your business grows or changes, your workers’ compensation insurance needs may evolve, making it essential to reassess your policy each year.
Final Thoughts
Whether you’re starting a new business or hiring your first employee, choosing the right workers’ compensation insurance helps protect your workforce while keeping your business compliant with state laws. These include: insurance carriers with good reputations, independent brokers, online business insurance companies, state insurance funds, and PEOs.
The correct policy can protect your employees, ensure your business stays within the laws of the state, and avoid putting yourself in severe financial debt for injuries in the workplace. When buying the policy, make sure to compare your quotes, see the coverage you get, and choose a carrier with experience in your industry and with good claims service.
For many businesses, buying workers’ compensation insurance is a mandatory step; however, it is a beneficial choice and one you should seriously consider to help your business prosper safely.
Key Takeaways
- Workers’ compensation insurance is required for most employers.
- Coverage pays for medical expenses, lost wages, disability benefits, and death benefits.
- Policies are available through private insurers, brokers, online marketplaces, state funds, and PEOs.
- Costs depend on payroll, industry risk, location, and claims history.
- Comparing multiple quotes helps businesses find better coverage at competitive prices.
Frequently Asked Questions (FAQs)
Is workers’ compensation legally required?
Nearly all states in the US require all employers to have workers’ comp insurance, though this is regulated by the state.
Can I purchase workers’ compensation online?
Yes, many insurance carriers and online marketplaces can allow you to get quotes and complete your purchase online.
How quickly can workers’ compensation insurance start?
You can sometimes get coverage on the same day that you apply and pay for your workers’ comp insurance.
Is workers’ compensation insurance offered for occupational diseases?
A workers’ compensation policy usually covers occupational disease, or it can be added with an endorsement or rider.
Can small businesses get workers’ compensation insurance?
Yes. Even businesses with one or two employees can purchase workers’ compensation coverage, and may be legally required to do so depending on state laws.
Reviewed by Business Insurance Research Team
Reviewed by insurance researchers and commercial insurance content specialists for factual accuracy, regulatory relevance, and industry best practices.
