Understanding Workers’ Compensation for Electricians
Workers' compensation for electricians protects workers in the event of a workplace injury or illness. It covers lost wages, medical expenses, funeral expenses, and potentially other costs.
Here’s what every electrician should know: the specific job risks, what workers' comp covers, the associated costs, and tips on purchasing it and reducing those costs.
What are the Risks of Electrical Work?
Electricians frequently come into contact with hazards while they work. It’s the nature of the job and can’t be avoided entirely.
In addition to numerous hazards, the severity of injuries can also be significant. An injury from an electric shock is usually worse than tripping in an office.
Common injuries for electricians include electric shocks, electrical burns, thermal burns, and falls. These injuries can cause long-term damage.
Many electricians also face height risks, especially when working on power lines. Working at great heights presents its own set of risks, which factors into the premium calculations of workers' compensation for electricians.
Even with proper equipment, accidents can happen, and sometimes no one is at fault.
Consider Job Risks before taking on Projects
When you take on different electrical jobs, it’s important to think about how they might increase your risk and affect your insurance costs.
Not all insurance companies will cover every type of work because some jobs are riskier and more prone to severe accidents.
Here are a few examples of tasks that need extra attention:
- Working with Generators and Transformers: These jobs involve high voltages and have a higher chance of accidents.
- Installing Holiday Lights: This job requires working high up, especially during colder months when surfaces may be slippery. Pitched roofs add extra risk due to steeper inclines and potential falls.
- Underground Electrical Work: This can lead to unexpected problems like water or gas leaks.
- High Voltage Environments: Be aware of the highest voltage levels you work with. Jobs involving very high voltage are more dangerous and might make it harder to get insurance.
Before you agree to do these kinds of jobs, make sure you understand the risks and confirm that your insurance covers them. This can help you manage your costs and ensure you're protected.
What does Workers’ Compensation for Electricians Cover?
Workers’ compensation for electricians primarily covers lost wages and medical expenses. “Medical expenses” means a wide range of things, however, and no two injuries are alike.
Individual states have different mandates dictating how long workers’ compensation lasts, the amount it pays out, and what it covers.
Workers’ compensation generally helps employees with:
Long or Short-Term Medical Costs - If an employee sustains an injury or illness on the job, workers’ compensation for electricians covers the associated medical costs as long as they’re related to the incident.
For some employees, that consists of a single hospital bill and a prescription. For others, workers’ comp covers treatment for the rest of their lives.
As an example, if an electrician sprains their foot on the job, workers’ compensation covers the cost of evaluation, scans, and treatment. It’s a short-term injury with (ideally) a short-term resolution.
If an electrical contractor suffers a severe electrical burn, however, they could have related medical issues for years.
In both cases, workers’ compensation insurance gets the electrician the care they need.
Lost Wages - The wage replacement rate varies by state. On average, lost workers’ comp covers wages at around two-thirds of the employee’s average weekly salary.
Some states have higher or lower rates and differ on when coverage kicks in.
In Florida, wage replacement begins after seven days of missed work and in Massachusetts’ coverage begins after five days.
Funeral Costs - In the unfortunate event that an employee dies as a result of a workplace accident, workers’ compensation covers funeral costs and pays out benefits to the deceased’s spouse or dependents.
The above is a brief, non-comprehensive look at just a few types of coverage employees have under workers’ compensation.
Maintaining coverage is incredibly important for electricians (and any type of employee). No one knows when the unexpected will happen.
Electrical Contractor Insurance Requirements
What insurance does an electrical contractor need?
Every state has guidelines for workers’ compensation insurance, and it’s unlikely any electrical contractor could be exempt.
Additionally, electricians must carry other types of insurance (like general liability or professional liability insurance), but only workers’ compensation for electricians is specifically geared toward covering employees and electrical workers for workplace incidents.
If protecting employees isn’t a compelling enough reason to purchase workers’ comp insurance, there are consequences for violating the associated laws.
Penalties for failing to insure workers can amount to tens of thousands of dollars.
Other potential outcomes include:
Stop Worker Order - A Stop Work Order (SWO) means that any operations cease immediately. SWOs are usually used for construction sites, but they’re one possible penalty for workers’ compensation violations.
Lawsuits - If a business doesn’t carry workers’ comp insurance or an employer handles procedures poorly, they may be sued. Filing workers’ compensation claims occurs within a specific window of time (depending on your state) and failure to file means a potential lawsuit.
Fines - Failing to carry workers' compensation for electricians or filing a claim outside the correct window of time means fines. They accumulate quickly and start to really add up.
All in all, the potential costs of not getting workers' compensation for electricians will probably outweigh the cost of premiums. It’s a major risk to take and leaves workers and the business at risk.
How much does Workers’ Comp Cost for Electricians?
For electricians, the cost of workers' compensation insurance averages about $2.67 per $100 of payroll. This equates to approximately $111 monthly for an annual payroll of $50,000.
Keep in mind that this is a rough average, as your actual costs will vary depending on your state and your claims history. For more details on this, visit Electrician Workers’ Comp Rate 2024.
How are Premium Costs Calculated?
An equation factoring in payroll information and class codes determines premium rates.
Payroll
Workers' compensation insurance rates are calculated per $100 of payroll. This means that as your payroll increases, so will your insurance premiums.
What are Class Codes?
Class codes, or comp codes, are set by the National Council on Compensation Insurance (NCCI).
They designate the risk associated with a position. Exposure to hazardous material, increased likelihood of injury, working with heights, and so on all indicate higher risk.
Insurance companies do not make comp codes, but they use them to calculate premium costs. Electricians and electrical workers have a handful of common comp codes.
- 5190 workers’ comp code - Electrician/electrical contractor
- 5190 workers’ comp code - Installation of electrical wiring systems within buildings
- 5190 workers’ comp code - Low voltage electrical work
- 7605 workers’ comp code - Burglar and Fire Alarm Installation
- 9516 workers’ comp code - Home Theater Equipment - Installation, Service, or Repair
- 7538 workers’ comp code - Utility and power line work
Definitions of comp codes differ slightly between states and insurance companies weigh costs differently. To learn more about these classifications, check out our guide to Electrician Workers’ Comp Code.
Tips for Lowering Costs
Workers’ compensation for electrical workers is likely expensive. There is no getting around that completely.
The duties are inherently high-risk, whether someone is performing power line work or doing electrical maintenance inside homes.
There’s variation (that’s what the class codes are for) but costs never match those of a secretary or data entry clerk.
However, there are ways to lower premium costs for electrician insurance. Many of them come with the added benefit of having well-trained workers.
Have a Safety Program
Having a formal, clearly written safety program for the insurance underwriter makes a difference. Address typical or frequent safety concerns, like training on scissor lifts, booms, ladders, and any other big equipment.
Complete Information
The more information you have, the better. Underwriters like knowing everything.
For electrical work, learn the maximum voltage typically worked with.
Leaving out information results in higher premiums - at that point costs are based on the unknown, and underwriters will assume the worst.
Sharing more information means more accurate pricing and possibly lower costs.
Safety Training
Along with the written safety program, follow through with training.
Health and safety training programs result in a well-prepared workforce and keep employees aware of risks, responses, proper use of equipment, and other ways to prevent injury and illness.
Check out all our tips on how to save money on electrician’s workers’ compensation costs.
Where to Purchase Insurance
Not every insurance company offers workers' compensation for electricians.
Some are unwilling to take the risk, and underwriters turn them away because of the high likelihood of accidents or injuries.
Some workers’ compensation programs are state-funded, but many states require companies to purchase their own plans. That’s complicated if insurance companies turn away high-risk businesses.
If you’re struggling to get the coverage you need for your business and employees, Kickstand Insurance can help.
The process is easy. Apply online and get a quote in just a few minutes.
You’ll have a certificate in hand as soon as 24 hours after the policy is bound.
Get expert help with figuring out classifications, protecting yourself and your business from lawsuits, and keeping all of your employees covered.
Even better - Kickstand Insurance checks for discount opportunities to lower your premiums further.
Don’t leave your employees and your business without coverage when you can get a quote and a policy in place in mere minutes.
Note: The information provided in this blog is intended for general informational purposes only and is not a substitute for professional legal or insurance advice. Laws and regulations regarding workers' compensation insurance are complex and vary by state and by specific circumstances. Therefore, readers are encouraged to consult with a qualified legal or insurance professional to obtain advice with respect to any particular issue or problem they might have.
Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.
The question people ask us most often is, “Does my business need workers comp?” This often leads to the second-to-most frequently asked question: ”Do owners need workers comp?”
