Workers’ Comp for Construction: How Does It Work?

By Mark Fitzpatrick

Edited by Lukas Velunta

Updated: September 10, 2025

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Key Takeaways

Workers' comp for construction provides no-fault coverage for jobsite injuries, covering medical costs and lost wages.

Most states require construction companies to carry workers' comp, regardless of company size.

Construction businesses need general liability, commercial auto and inland marine insurance beyond workers' compensation coverage.

How Does Workers’ Comp Insurance Work for Construction Workers?

Workers' comp insurance for construction workers provides coverage regardless of fault. Construction deaths account for 21% of U.S. worker deaths in 2023, with nail gun accidents, scaffolding falls and power tool injuries happening regularly.

Coverage includes medical care and ongoing treatment, partial wage replacement (60 to 70 percent of earnings while recovering, subject to state maximums and waiting periods), disability benefits for permanent injuries and death benefits for families. Workers' comp insurance provides necessary protection in an industry where serious injuries devastate workers financially.

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Do I Need It as a Direct-Hire Construction Employee?

Direct-hire construction employees don't need to purchase workers' comp insurance. Your employer is legally required to provide this coverage, and employees cannot opt out since workers' comp insurance provides mandatory employment protection.

Coverage starts from your first day on the job, whether working full-time, part-time or seasonally. Construction companies face stricter requirements than other industries, with many states requiring coverage regardless of company size.

Do I Need It as a Temporary Worker Through an Agency?

Temporary construction workers placed through agencies don't need to purchase workers' comp insurance. Staffing agencies are responsible for providing this coverage. Washington State law confirms that staffing companies must pay workers' compensation premiums for temporary employees.

Before starting construction assignments, request proof of workers' compensation insurance from your agency and clear reporting instructions for jobsite injuries.

Do I Need It as an Independent Contractor in Construction?

Independent construction contractors especially need workers' comp insurance due to high injury risks. Solo construction contractors like roofers or electricians are exempt in some states, while subcontracting companies with employees must carry workers' comp insurance in most states.

Requirements vary by state. Pennsylvania requires construction contractors to have coverage, while Georgia allows sole proprietors to work without coverage. Construction general contractors also require proof of coverage before allowing work on jobsites.

Without coverage, contractors face removal from jobs or hefty penalties. Check your state's rules before taking on construction work and read each contract's insurance requirements carefully.

Workers’ Comp Coverage Requirements for Construction Businesses by State

Workers' compensation requirements vary widely by state, with most requiring coverage starting with your first employee. However, some states set thresholds at three, four or five employees before coverage becomes mandatory.

Construction is different. Even in states with higher thresholds, construction companies must get coverage from day one. Nine states go even further with special rules.


California	1+ employees	Required for all construction employers, even with one employee. Roofers face rates of $24 to $80 per $100 payroll	Fine up to $100,000; misdemeanor with up to 1 year jail time
Colorado	1+ employees	Additional insurance requirements for construction beyond the standard mandate	$500 per day uninsured; business shutdown possible
Florida	1+ employees (construction)	Construction companies need coverage with 1+ employees vs. 4+ for other industries	Double premiums for non-compliance period, minimum of $1,000; stop-work orders
Georgia	3+ employees	Independent contractor classification contested frequently in construction	$1,000–$10,000 fine; up to 1 year prison; misdemeanor charge
Pennsylvania	1+ employees	Construction companies must verify that they correctly classified all their workers as employees for coverage	$15,000 fine; up to 7 years jail for willful non-compliance
Ohio*	1+ employees	Must use Ohio Bureau of Workers' Compensation; all construction employees must be covered	Stop-work orders; criminal penalties
North Dakota*	1+ employees	Must use North Dakota Workforce Safety & Insurance; covers all construction employees	Up to $1,000 fine; up to 1 year prison
Washington*	1+ employees	Must use Washington State Department of Labor & Industries; all construction workers covered	Misdemeanor charges; business closure
Wyoming*	1+ employees	Must register with the Wyoming Department of Workforce Services; covers all construction employees	Up to $1,000 fine; up to 1 year in prison

*Disclaimer

Monopolistic states require state-fund coverage only, and no private insurance is allowed. These states don't include employers' liability coverage, requiring separate "stop gap" coverage.

Workers' compensation requirements vary by state and change frequently. Consult your state's workers' compensation board or a licensed insurance professional for current requirements specific to your situation.

Is Workers' Comp Coverage Enough for Construction Businesses?

Workers' comp doesn't cover all risks construction businesses face. Although workers' comp protects employees when injured on the job, construction businesses need other coverage types for comprehensive protection:

General Liability Insurance

General liability insurance covers injuries to non-employees and property damage. General liability insurance provides essential protection for general contractors working on client sites where accidents affect homeowners, passersby or other workers.

Commercial Auto Insurance

Commercial auto insurance is required for business-owned vehicles. Construction crews rely heavily on trucks and equipment transport, making commercial auto coverage crucial for protecting company vehicles and drivers.

Inland Marine/Equipment Insurance

Inland marine insurance protects construction tools and equipment moving between jobsites. While commercial property covers items at main locations, inland marine protects mobile equipment during transport between work sites.

Builder's Risk Insurance

Builder's risk insurance covers construction projects during building phases against fire, theft, vandalism and weather damage. Builder's risk insurance provides critical protection for general contractors managing large construction projects where materials and partially completed work face constant exposure.

Commercial Property Insurance

Commercial property insurance safeguards offices, warehouses and stored materials against fire, theft or weather damage. Many contractors overlook commercial property insurance until losing thousands in stored lumber or tools.

Cyber Liability Insurance

Cyber liability insurance becomes increasingly important as construction companies handle client data, payroll systems and digital project management. Even small contractors face cyber risks through email and cloud storage.

Construction Workers’ Comp Insurance: Bottom Line

Construction workers' comp covers medical bills and lost wages when jobsite accidents happen. Most states require workers' comp regardless of crew size since construction work carries serious risks. Workers' comp provides essential protection, but construction businesses also need general liability, commercial auto and equipment coverage for complete financial protection.

Construction Workers’ Comp: FAQ

MoneyGeek's experts answered common questions about workers' comp for construction workers and business owners:

What does workers' comp insurance cost for construction companies?

Construction companies with three employees pay around $181 monthly ($2,175 annually) for workers' comp. Costs depend on your state and construction work type. Roofing costs more than basic carpentry due to higher injury risks.

Costs vary based on state, specific construction activities, safety record and other factors. Contact licensed insurance professionals for personalized quotes.

What injuries are most common in construction work?

Falls from scaffolding and ladders lead construction injuries, followed by nail gun accidents and power tool cuts. Back injuries from heavy lifting and joint problems from repetitive work occur frequently. Equipment accidents and burns also happen regularly in construction work.

Do construction companies need additional insurance beyond workers' comp?

Construction companies need general liability, commercial auto and equipment coverage beyond workers' comp. Builder's risk protects active projects, while commercial property covers offices and stored materials. Workers' comp doesn't cover all business risks.

How do I file a workers' comp insurance claim for a construction injury?

Report injuries to employers immediately and seek medical care from approved doctors. Employer insurance companies guide workers through filing claims and handle paperwork. Workers' comp covers medical bills and replaces most paychecks during recovery.

What does construction workers' compensation insurance cover?

Workers' comp covers medical bills, ongoing treatment and 60 to 70 percent of pay while unable to work. Workers' comp also pays disability benefits for permanent injuries and death benefits to families, plus legal costs when needed.

Benefits vary by state, with different percentage ranges or caps on weekly benefits.

Which states require workers' comp for construction companies?

Most states require coverage for the first employee. Construction companies don't wait until reaching three or five workers like other businesses. California, Colorado, Florida and Pennsylvania strictly enforce immediate coverage requirements for construction companies due to high injury risks.

What happens if construction companies don't have workers' comp insurance?

Construction companies without workers' comp face business shutdowns, fines up to $100,000 and jail time depending on state laws. Pennsylvania imposes $15,000 fines and up to seven years in prison for willful violations. Legal compliance protects both businesses and workers.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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sources

California Contractors State License Board. "Workers' Compensation Requirements." Accessed August 12, 2025.
Colorado Department of Labor and Employment. "Workers' Compensation." Accessed August 12, 2025.
Florida Department of Financial Services. "Coverage Requirements." Accessed August 12, 2025.
Georgia State Board of Workers' Compensation. "Employer Information." Accessed August 12, 2025.
Georgia State Board of Workers' Compensation. "Workers' Compensation Insurance FAQs." Accessed September 30, 2025.
Pennsylvania Department of Labor & Industry. "Purchasing Workers' Compensation Insurance." Accessed August 12, 2025.
Pennsylvania Department of Labor & Industry. "Workers' Compensation." Accessed August 12, 2025.
Ohio Bureau of Workers' Compensation. "Coverage Requirements." Accessed August 12, 2025.
North Dakota Workforce Safety & Insurance. "Coverage Information." Accessed August 12, 2025.
U.S. Bureau of Labor Statistics. "Fatal Falls In The Construction Industry In 2023." Accessed August 12, 2025.
Washington State Department of Labor & Industries. "Temporary Staffing." Accessed August 12, 2025.
Washington State Department of Labor & Industries. "Workers' Compensation." Accessed August 12, 2025.
Wyoming Department of Workforce Services. "Workers' Compensation." Accessed August 12, 2025.

Worker's Comp for Construction