How to Get Workers' Compensation Insurance

Each state has workers' compensation requirements that vary by industry and business size. Most states require employers to have workers' comp insurance, with the number of employees determining when coverage is required. Some states require coverage for all businesses with employees, while others set thresholds based on employee count or industry type.

Texas and South Dakota are the only states without mandatory workers' compensation insurance.

Workers' compensation class codes are two to six-digit numbers insurance companies assign to different job titles. These codes help insurance companies determine your premium based on the risk level of each job type. Higher-risk industries like construction pay more for workers' comp insurance than low-risk industries like accounting. 

The National Council on Compensation Insurance classification system contains about 800 unique class codes. Find your classification codes through:

• Census.gov lookup tool
• Your state's workers' compensation agency

Workers' compensation policies include:

• Part A (Employee benefits): Covers medical expenses, income replacement and rehabilitation costs for injured employees
• Part B (Employer liability): Protects your business from lawsuits filed by injured employees

Typical Coverage Recommendations:

While workers' compensation isn't mandatory in every state, MoneyGeek strongly recommends that businesses have a policy. Here's what's most often recommended:

• Employer liability limits: Most businesses choose $1 million per accident, $1 million per employee and $1 to $2 million policy limit
• Medical coverage: Unlimited medical benefits are standard and required in most states
• Income replacement: Usually covers around 67% of the employee's average weekly earnings, up to state maximums

Before requesting quotes, you'll need business information, including:

• Business name and industry type
• Number of employees
• Annual payroll amounts by job classification
• Previous claims history (if any)
• Financial statements or proof of financial stability

Getting multiple quotes helps you compare workers' compensation insurance costs and coverage options. Many insurers offer online quote tools that take just minutes to complete, while others may require a phone call with an agent. MoneyGeek recommends comparing apples to apples, meaning quotes with the same or similar coverage levels, to ensure you get the best business insurance deal.

Review the policy details, including coverage limits, deductibles and exclusions. Verify all states where you have employees covered, confirm payroll estimates are accurate to avoid audit surprises and understand optional features like deductible plans that can reduce premiums. Review cancellation terms and ask questions about anything unclear before signing.