Workers’ Comp for Construction: How Does It Work?

By Mark Fitzpatrick

Updated: August 12, 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 covers you no matter whose fault it was. Construction deaths account for 20.8% of U.S. worker deaths in 2023, with nail gun accidents, scaffolding falls and power tool injuries happening regularly.

The coverage includes medical care and ongoing treatment, partial wage replacement (typically 60% to 70% of your earnings while recovering), disability benefits for permanent injuries and death benefits for families. It's essential in an industry where serious injuries can devastate workers financially.

Do I Need It As A Direct-Hire Construction Employee?

You don't need to buy workers' comp insurance as a direct-hire construction employee. Your employer is legally required to provide this coverage for you, and you can't opt out even if you wanted to since it's mandatory protection that comes with employment.

Coverage starts from your first day on the job, whether you're working full-time, part-time or seasonally. Construction companies often 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?

You don't need to purchase workers' comp insurance as a temporary construction worker placed through an agency. Your staffing agency is responsible for providing this coverage. For example, Washington State law confirms that staffing companies must pay workers' compensation premiums for their temporary employees.

Before starting any construction assignment, 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?

Yes, especially in construction, where injury risks are high. Solo construction contractors like roofers or electricians may be 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 it. Construction general contractors also require proof of coverage before allowing work on jobsites.

Without coverage, you could be removed from the job or face 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.

Is Workers' Comp Coverage Enough For Construction Businesses?

Workers' comp alone won't cover all the risks construction businesses face. While it protects your employees when they get hurt on the job, you'll need other coverage types to protect your business from all the risks you face:

General Liability Insurance

Covers injuries to people who aren't your employees and property damage. It's essential for general contractors working on client sites where accidents can affect homeowners, passersby or other workers.

Commercial Auto Insurance

Required if your business owns vehicles. Construction crews rely heavily on trucks and equipment transport, making this coverage crucial for protecting company vehicles and drivers.

Inland Marine/Equipment Insurance

Protects construction tools and equipment that move between jobsites. While basic commercial property covers items at your main location, inland marine protects your mobile equipment when you're working across town or transporting it to job sites.

Builder's Risk Insurance

Covers construction projects during the building phase against fire, theft, vandalism and weather damage. It's critical for general contractors managing large construction projects where materials and partially completed work face constant exposure.

Commercial Property Insurance

Safeguards your office, warehouse and stored materials against fire, theft or weather damage. Many contractors overlook this until they lose thousands in stored lumber or tools.

Cyber Liability Insurance

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 your medical bills and lost wages when jobsite accidents happen. Most states require it, no matter how small your crew is, since construction work carries serious risks. But workers' comp alone won't protect you against everything. You'll also need general liability, commercial auto and equipment coverage for complete financial protection.

Construction Workers’ Comp: FAQ

We get many frequently asked questions about workers' comp for construction from construction workers and business owners. See our answers below:

What does workers' comp insurance cost for construction companies?

We found construction companies with three employees pay around $181 monthly ($2,175 annually) for workers' comp. Your cost depends mainly on your state and the type of construction work you do. For example, roofing costs more than basic carpentry.a

What injuries are most common in construction work?

Falls from scaffolding and ladders top the list, followed by nail gun accidents and power tool cuts. You'll also see many back injuries from heavy lifting and joint problems from repetitive work. Equipment accidents and burns happen frequently, too.

Do construction companies need additional insurance beyond workers' comp?

You'll need general liability, commercial auto and equipment coverage beyond workers' comp. Builder's risk protects your active projects, while commercial property covers your office and stored materials. Workers' comp alone won't cover everything that can go wrong.

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

Tell your boss right away and get medical care from approved doctors. Your employer's insurance company will walk you through filing a claim. They'll handle the paperwork. Workers' comp covers your medical bills and replaces most of your paycheck while you recover.

What does construction workers' compensation insurance cover?

Workers' comp covers your medical bills, ongoing treatment and about 60% to 70% of your pay while you can't work. It also pays disability benefits if you're permanently injured and death benefits to your family, plus legal costs if needed.

Which states require workers' comp for construction companies?

Most states require coverage for your first employee. There's no waiting until you reach three or five workers like other businesses. California, Colorado, Florida and Pennsylvania are especially strict about construction companies having coverage immediately because of the high injury risk.

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

Depending on your state, you could face business shutdowns, fines up to $100,000, and even jail time. Pennsylvania imposes $15,000 fines and up to seven years in prison for willful violations. It's not worth the risk.

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 August 15, 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