Workers’ Compensation Rates by Class Codes

Workers' compensation insurance premiums are set using class codes that reflect the nature of work performed. These codes help insurers to assign appropriate rates based on the level of risk associated with different job types. The rates by class code listed here represent an average across various states from one of our main partner carriers:

Keep in mind that these figures are estimates to give you a general idea of potential rates. 

What are Class Codes in Workers' Compensation?

When you purchase workers' compensation insurance, your premiums are based on the risks associated with the work your employees perform. To figure out the level of risk, insurance companies use class codes. Class codes are three- or four-digit codes that represent different types of work. Each code has a corresponding rate that reflects the likelihood of injury or illness associated with that type of work.

For example, a landscaper will have a different class code and rate than an office worker. The landscaper's job is more physically demanding and carries a higher risk of injury, so their rate would be higher. The office worker's job is less physically demanding and carries a lower risk of injury, so their rate would be lower.

Make sure that your employees are classified correctly, as incorrect classification can lead to incorrect premiums. This is where it's important to work with an insurance company that understands the nuances of class codes and can help you navigate the system.

How to Calculate your Premium 

If you want to know how much a workers’ comp insurance policy will cost, you can get a rough idea by doing a bit of math. It’s simpler than it looks, just follow the steps below.

Follow a simple formula:  (Annual Employee Payroll / $100) x Industry Rate = Your Estimated Premium

First, take your total annual payroll and divide by $100.

Next, find your estimated rate - reach out to an insurance agent or refer to the provided rate chart above. 

Remember that this is an approximation, and the actual premium will also include fees and taxes and other things like that. 

Watch this video to learn more about calculating your workers’ comp rate.  

Strategies for lowering Premiums

By improving workplace safety and regularly reviewing your class codes, you can reduce the risk of accidents and claims, which will ultimately help to lower your premiums.

Improving Workplace Safety

One way to lower your workers' compensation premiums is to improve workplace safety. By implementing safety protocols and providing training to your employees, you can reduce the risk of accidents and injuries on the job. This can help to lower your claims and, in turn, lower your premiums.

Some strategies for improving workplace safety include:

Conducting regular safety audits to identify potential hazards
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Providing ongoing safety training to employees
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Encouraging employees to report safety concerns or hazards
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Ensuring that all employees have access to proper safety equipment and protective gear
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By taking these steps, you can help to create a safer work environment and reduce the risk of accidents and injuries.

Regularly reviewing Class Codes

Another way to lower your workers' compensation premiums is to regularly review your class codes. By reviewing your codes regularly, you can ensure that you are accurately classified and that you are paying the appropriate premiums. This can help to prevent overpayment and reduce your overall costs.

Some strategies for reviewing your classification codes include:

Consulting with an insurance professional to ensure that you are classified correctly

Reviewing your codes regularly to ensure that they are up-to-date and accurate

Providing documentation to support any changes to your classification codes

By taking these steps, you can ensure that you are paying the appropriate premiums and that you are accurately classified based on the work you do.

From Our Files:
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‍A pest control business in North Carolina with interior remodeling services approached us seeking to lower their insurance premiums. The owner was already classifying employees in three distinct classes: pest control (code 9014), interior framing (code 5645), and interior construction services (code 5437).

Reviewing the client's policy, we identified an opportunity to classify further. Employees who installed sun pumps were reclassified under plumbing (code 5183). Through meticulous payroll splitting and finding a carrier offering competitive rates, we reduced their premium from $24,000 to an impressive $10,170!

How much will workers’ comp insurance cost you?

Now that you know how workers' compensation rates are determined and what factors affect them, it's time to get a quote for your business. Simply enter your business information, including your industry and number of employees, and our tool will generate a quote for you in seconds.

Don't risk your business by not having the proper workers' compensation insurance. Get a quote today to get the coverage you need at a price you can afford.