Workers' Comp Insurance

Workers' comp guarantees medical care and partial wage replacement when employees get hurt or sick at work. It's required in nearly every state, protects employees regardless of who caused the injury, and shields your business from most workplace injury lawsuits by making workers' comp benefits the employee's only remedy.

A standard workers' comp policy includes three main coverage parts:

• Workers' Compensation Insurance (Part A): Pays all state-required benefits for work-related injuries and illnesses, including medical treatment, wage replacement (typically two-thirds of their average weekly wage), rehabilitation services and death benefits for surviving dependents. This coverage has no dollar limit since the benefits are determined by your state's law, not your policy.
• Employers' Liability Insurance (Part B): Covers lawsuits from employees or their families in specific situations where workers' comp doesn't apply, such as third-party claims, claims you purposely caused harm, or when a spouse sues for loss of support. Unlike Part A, this coverage has dollar limits you select when purchasing the policy.
• Other States Insurance (Part C): Covers lawsuits from employees or their families in specific situations where workers' comp doesn't apply, such as third-party claims, claims you purposely caused harm, or when a spouse sues for loss of support. Unlike Part A, this coverage has dollar limits you select when purchasing the policy.

Below, you can explore specific workers' comp topics—starting with whether your state requires coverage and what you'll pay.

Workers' comp is often confused with other business coverages because many protect against employee-related risks. For example, business owners sometimes assume their health insurance will cover an employee's broken arm from a warehouse accident, or that their general liability policy handles workers' comp claims. 

Use the comparison below to avoid buying the wrong coverage, leaving gaps in protection, or paying twice for overlapping benefits.

Whether you need workers' comp depends on your state's laws (most require it once you hire your first employee, though some set higher thresholds) and contractual requirements from clients or landlords. 

Your business likely needs workers' comp if you:

• Have employees on payroll: Most states require coverage as soon as you hire your first W-2 employee, regardless of whether they work full-time or part-time
• Hire seasonal or temporary workers: Coverage typically applies to all employees, including those working short-term during busy periods
• Use subcontractors or 1099 workers: Rules vary by state, and misclassifying employees as contractors can trigger penalties and retroactive premium charges
• Operate in high-risk industries: Construction, manufacturing, healthcare, and similar fields often have stricter requirements or lower employee thresholds
• Need to meet contract requirements: Clients, general contractors, or property owners frequently require proof of workers' comp before allowing you to start work
• Lease commercial space: Landlords often require workers' comp documentation as part of lease agreements, even if your state doesn't mandate coverage

To figure out whether workers' comp applies to your business, explore these resources:

• Do I Need Workers' Comp Insurance?
• What Are Workers' Comp Insurance Requirements?

The cost of workers' comp insurance averages $113 per employee per month (or about $1,354 annually) for businesses with one to four employees. Your actual cost depends on your industry, payroll, claims history, location and the types of work your employees perform.

Cost is primarily influenced by the following factors:

Once you understand that workers' comp is required and have a sense of what it costs, the next step is how to get workers' comp insurance before legal deadlines hit. Missing these deadlines can result in fines, contract violations or operating illegally. Follow the five steps below to get coverage efficiently and avoid common mistakes that delay the process:

You need workers' comp coverage, but your specific situation determines what you should focus on first. You might be hiring your first employee and need coverage fast, comparing insurers to find better rates, or trying to figure out if your existing policy has the right endorsements. The guidance below helps you take the right next step based on where you are.

If you're ready to compare workers' comp insurance quotes, MoneyGeek can match you to a top provider that specializes in your industry and understands your business risks. Use the tool below to get matched.