Best Workers’ Comp Insurance for Small Business

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Contributor, Benzinga
Updated: August 11, 2022

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Quick Look: The Best Workers’ Comp Insurance for Small Business

Even the safest workplaces present risk. Workers’ compensation insurance protects your workers as well as your business. 

Start with Benzinga’s guide to learn how workers’ comp insurance for small business works. 

Best Small Business Workers Comp Insurance 

Here are Benzinga’s picks for the best workers’ compensation insurance

The Hartford

  • The Hartford Workers Comp
    More Details
    Same Day Coverage?
    Yes
    Online Application?
    Yes
    securely through The Hartford Workers Comp's website
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Founded in 1810, The Hartford has a long history of insuring businesses. It’s the number 2 workers compensation insurer in the country with high ratings from A.M. Best, an organization that rates insurance companies. 

It has high ratings from its customers due to its easy claims process and flexible billing options. 

It also has an extensive medical network with over 1 million providers and a Nursed Back to Health Program. That program uses experienced nurse case managers to coordinate care and support your employees. 

B2Z Insurance

  • B2Z Insurance
    More Details
    Online Application?
    Yes
    securely through B2Z Insurance's website
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    B2Z is available in the following states: Arizona, Colorado, Georgia, Idaho, Illinois, Indiana, lowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin.

Finding workers’ compensation insurance is not optional. Seek out quality coverage that meets the minimum requirements set forth by your state. Remember, every state is different, and you must work with an insurer that can provide you with both quality and legally-viable insurance.

Visit the B2Z website to shop at your convenience and get a coverage decision in minutes. B2Z protects your business with personalized coverage. Aside from workers’ comp, you can also invest in cyber insurance, professional liability coverage, a business owner’s policy, and hired and non-owned automobile coverage. B2Z explains it all in simple terms. Live chat with the customer service team or send a question any time you need clarification.

CoverWallet

  • CoverWallet SBI (MediaAlpha)
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    Best For
    Start-ups, the self-employed and small businesses
    Overall Rating
    Read Review
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The traditional approach to insurance involves calling and talking to agents about quotes or visiting several websites. CoverWallet streamlines that process by allowing you to get quotes through its website. You can also manage the policy through its platform. 

It uses an intelligent application so you only need to answer relevant questions. Its algorithm matches you to insurance providers that make sense, and you can print out certificates of insurance any time. 

CoverWallet also offers a pay-as-you-go option, where you make premium payments each time you do payroll. 

Progressive

  • Progressive Workers Comp
    Same Day Coverage?
    Yes
    Online Application?
    Yes
    securely through Progressive Workers Comp's website

Another way to simplify insurance shopping is by getting all of your coverage through the same insurer. Progressive offers the Progressive Advantage Business Program. With 1 call or a few clicks, you can secure a business owner’s policy, professional liability insurance, commercial auto insurance and workers’ compensation insurance. 

For the lines Progressive doesn’t directly offer, it works with reputable carriers it’s selected. Whether you contact them by phone or online, its experts are ready to help you choose the right workers’ comp policy for your business. 

Mylo

  • Mylo Business Insurance
    securely through Mylo Business Insurance's website

Insurance agents represent one or more insurance companies. Insurance brokers represent you, and their primary interest is in finding you the best policy for your business needs. Mylo was started in 2015 by Lockton Companies, which is the largest independent insurance broker in the world. 

Mylo uses artificial intelligence to find you the best workers comp policy (and other business insurance). It works with top-rated insurance partners and it doesn’t charge you any fees for connecting you with a provider. It’s another easy way to compare quotes from multiple trusted providers. 

Hiscox

  • Hiscox
    More Details
    Online Application?
    Yes
    securely through Hiscox's website
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Hiscox is a leading insurer for small businesses with over 400,000 small business clients. It’s been in business since 1901 and offers a range of business insurance policies, including workers’ compensation. 

Hiscox has partnered with CyberPolicy to make getting a quote simple and painless. You can get an estimate in a few minutes. It can tailor its policies to your business needs, and it has high ratings from its customers. 

Small Business Workers Comp Insurance: An Overview

Workers’ compensation insurance helps pay for the care employees need if they experience a work-related injury or illness. Small businesses will need to contact insurance providers for quotes to secure workers’ compensation insurance. 

The main difference between workers’ comp for small businesses versus larger employers is that in some states, very small businesses may not be required to purchase workers’ compensation. 

How Does Workers’ Compensation Law Work?

Workers’ compensation law varies significantly from state to state. Texas is the only state where workers’ compensation isn’t mandatory. Some states offer exceptions for very small businesses. 

For example, in Alabama, organizations with less than 5 employees aren’t required to carry coverage. In Georgia, businesses with less than 3 people are exempt. 

Workers’ compensation laws evolved to ensure employers treat employees fairly if they experienced a work-related injury or illness. Employers liked workers’ compensation laws because the laws protect them from most lawsuits around work-related injuries. As long as employers are compliant with workers’ compensation law in their state, employees typically can’t sue them.

Medical and Vocational Benefits 

Workers’ compensation pays the medical costs for employees with a work-related illness or injury. Benefits typically include:

  • Medical care, including doctor’s visits or hospital care
  • Prescription reimbursements
  • Mileage reimbursements for travel to and from medical appointments

Workers’ compensation also helps employees get back to work. Some states offer vocational rehabilitation. This helps workers retrain if they’re no longer able to work in their pre-injury jobs. 

Types of Workers’ Compensation Claims

State workers’ compensation laws vary in terms of benefit amounts, where businesses can purchase insurance and what injuries and illnesses are covered. In general, workers’ compensation offers these benefits:

  • Medical-only claims. The majority of workers’ comp claims fall into this category. A worker might have a minor injury like a burn or a cut and need medical attention, but they don’t need to take enough time off to trigger disability benefits. There’s typically a waiting period of 3 to 7 days before lost-time benefits are paid, and minor injuries may not require that much time off work. In these cases, workers’ comp covers medical care but not lost wages. 
  • Temporary total disability claims. Employees may need more time off to recover before returning to work. If they’re unable to return to work in their pre-injury job or another job with the same employer, they may be eligible for temporary total disability benefits. Most workers’ compensation plans pay ⅔ of the employee’s pre-tax income. The lower pay is because workers’ compensation benefits aren’t taxable. Most states have a minimum and maximum benefit amount, and they vary significantly depending on where you live. 
  • Temporary partial disability claims. Sometimes employees may be able to work reduced hours or in another position with lower pay. In these situations, employees may be eligible for temporary partial disability benefits. These benefits help make up for their lower income. 
  • Permanent disability claims. In some cases, employees may not be able to return to work. Depending on the injury or illness, they may be eligible for permanent partial or total disability. Permanent partial disability benefits are for employees who may be able to work in some capacity. Total disability benefits are for employees who will no longer be able to work. 
  • Death benefits. Workers’ compensation plans also pay death benefits to cover funeral and burial expenses. Dependents and family members are paid benefits as well. State laws often determine the level of death benefits that are available.

Injuries That Aren’t Covered by Workers’ Comp

While workers’ compensation covers most workplace injuries, there are some exceptions, which include:

  • Injuries caused by horseplay
  • Injuries caused during a criminal act
  • Self-inflicted injuries
  • Injuries that occurred while intoxicated
  • Injuries during a voluntary, off-duty recreational activity
  • Injuries that occur after being laid off or terminated

Small Business Workers Comp Insurance Cost

Workers’ comp insurance costs for small businesses are based on several factors. 

  • The type of work. Insurers look at the risks involved in the work you do. They assign your business a class code from the National Council on Compensation Insurance. 
  • How much employees are paid. Workers’ comp insurance is priced based on each $100 of payroll. The higher your payroll, the more your workers’ compensation will cost. 
  • Where your business is located. State laws vary, so insurance costs vary as well. States may also add taxes and fees. 
  • Your claims history. If you have a claims history, your costs may increase or decrease depending on how your claims compare to other similar businesses. This is called an experience modifier. 

The formula for determining workers’ compensation insurance costs is:

Class Code Rate X Experience Modifier X (Payroll/$100) + State Taxes and Fees

While that might sound expensive, costs for workers’ comp insurance have been declining. A study by the state of Oregon showed the average costs in 2020 as $1.02 per $100 in payroll, which is down from $1.11 in 2019. 

Do You Need Workers’ Comp Insurance?

Even if you’re not required to purchase workers’ compensation insurance, it’s beneficial to small businesses to buy a policy. It protects your workers and shows that you’re invested in their health and safety. 

It also protects your business. Even 1 claim for medical costs and lost wages could cost your business significantly. It makes sense to purchase a policy and lower your risk. 

Most states allow you to self-insure, which could be an alternative to buying workers’ comp insurance. To self-insure, you must show that you have enough funds set aside to cover workers’ compensation claims. 

That’s cost-prohibitive for most small businesses, especially new ones that need all their cash flow to keep things running. Workers’ compensation insurance is often a better use of your funds. 

Enter your ZIP code now to compare quotes from multiple providers and find a policy today.

Frequently Asked Questions

Q
Is workers’ comp insurance expensive?
A

Workers’ comp insurance can be expensive depending on how many employees you must cover, but you should also shop around before making a purchase.

Q
Does workers’ comp insurance prevent lawsuits?
A

Generally, the insurance carrier takes on liability when a claim is filed, but you should speak to an attorney if you feel your employer is somehow liable for your accident. Employers should also retain an attorney to obtain relevant and expert legal advice.

Methodology

Benzinga crafted a specific methodology to rank workers comp insurance. We prioritized carriers based on coverage options, specialized industries, customer service experience and how quickly and easily you're able to get insured including online tool usage. We also included workers comp insurance quote aggregators in lists to make it easy and efficient to compare policy quotes and options. To see a comprehensive breakdown of our methodology, please visit see our Workers' Compensation Insurance Methodology page.

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