What Factors Can Play A Role In How Much Your Workers' Compensation Insurance Policy Will Cost?

The price you will pay for workers' compensation insurance can vary compared to the price that another business owner will pay. This may leave you wondering what affects pricing. Read on to learn about three different factors that can directly impact how much your workers' compensation insurance policy will cost. 

The Type of Industry You Are In

One factor that has a huge impact on the price that you will pay for workers' compensation insurance is the type of industry that your business is in. If your company builds homes or commercial buildings, you will pay more for workers' compensation insurance compared to an insurance company, where employees are sitting at a desk most of the day. Different industries carry different risks. Employees in riskier industries are more likely to get injured on the job, which can drive your costs up. Insurance companies keep track of what industries have the most insurance claims, and adjust rates accordingly. 

The Numer of Employees You Have

Another factor that can play a role in how much your workers' compensation insurance policy will cost is the number of employees that you have. Someone who has 10 employees will likely pay less for a workers' comp insurance plan compared to someone who has 100 employees. Most insurance companies require you to provide a range of the number of employees you employ, as they know numbers can fluctuate. However, if you have major changes to your employment numbers, such as opening a new office or laying off staff, you should contact the insurance company to get your policy adjusted. 

Your Past Claim History

The final factor that can play a role in how much your workers' compensation insurance policy will cost is your past claim history. Most states limit how far back an insurance company can look, but typically, the insurance company can look back at least a few years. If they see you have a high number of claims, you will pay more compared to someone else who only has one claim on record. 

Workers' compensation is required if you have any employees. The insurance helps to pay for medical treatment, lost wages, and permanent disabilities that employees may suffer if they are injured on the job. The cost of workers' compensation insurance can vary based on the type of industry you are in, the number of employees you have, and your past claim history with your current or previous workers' compensation insurance provider. Contact companies that offer workers' compensation insurance to obtain quotes and compare pricing for your next insurance policy.