Workers' Compensation Insurance Cost Calculator

Your experience mod compares your actual claims costs to what was expected for a business of your size and industry within your specific state, not against a national average. That distinction matters because the benchmark shifts with the state. A mod of 1.0 in New York, where my data shows employers averaging $269/month per employee, means something entirely different in dollar terms than a mod of 1.0 in Indiana at $63/month. 

A favorable mod saves more in absolute dollars where the base rate is already high, and a debit mod compounds an already expensive market. It is also worth noting that not all states use the same rating bureau. NCCI governs the mod calculation in 36 states, while California, New York, Pennsylvania, New Jersey, and Delaware operate independent rating plans with their own formulas.

Workers' comp is the only coverage type in my study where per-employee cost actually decreases as your business grows. A 1 to 4 person business pays $113/month per employee on average. A 5 to 9 person business pays $102/month. A 20 to 49 person business pays $89/month. That 21% per-employee decrease happens because larger payrolls spread fixed administrative costs across more premium volume, and larger businesses tend to qualify for experience rating adjustments that reward a clean growth trajectory. Total cost goes up as you add employees. Cost per employee comes down.

Prior claims affect your premium through your experience mod, but they also affect it directly at the carrier level before a mod is even calculated. Carriers with unfavorable loss experience in your class code will price more conservatively or decline to quote altogether. Workers' comp claims are also long-duration events, meaning a serious injury can affect your rating window for the full three years it takes to rotate out of the calculation. If your business has had claims, be upfront when requesting quotes and prioritize carriers that specialize in your industry, who are generally more comfortable underwriting businesses with prior loss history than generalist carriers are.

After all state-approved factors are applied, each carrier adds its own expense load, profit target, and industry-specific risk assessment on top. A carrier that has had favorable claims experience in your class code will price it more aggressively than one that has not, which is why the cheapest option for a cleaning company is often not the cheapest option for a restaurant or a contractor. 

This is the primary reason getting at least three quotes before binding is the single most impactful cost-reduction step available to most small businesses, and why carriers that specialize in your industry are worth prioritizing over household-name generalists who write everything.