Author: Daniel Reyes, CPCU, Commercial Lines Specialist | Published: June 2026 | Last Updated: June 2026
The Short Answer
The best workers comp insurance for a small business combines competitive rates for your specific trade classification, a financially stable carrier, and fast certificate issuance. Top options include The Hartford, Travelers, Employers Holdings, Pie Insurance, and state-assigned risk pools as a last resort. The right fit depends on your payroll, industry class code, claims history, and state.
Who this is for: Small business owners in any industry who need to purchase, compare, or switch workers compensation coverage — especially those with 1–50 employees or payroll under $5 million.
TL;DR — Key Takeaways
- Most states require workers comp the moment you hire your first W-2 employee; some states have thresholds of 3–5 employees, but coverage is almost always mandatory in commercial work. [verify state]
- Cost is payroll-based, rated per $100 of payroll using NCCI classification codes — a clerical worker costs roughly $0.30–$1.00 per $100 payroll; a roofer can cost $20–$40+ per $100 payroll.
- The Hartford and Travelers are consistently strong for established small businesses; Pie Insurance and Next Insurance are competitive for newer or smaller accounts.
- Your Experience Modification Rate (EMR) is the single biggest lever on your premium after classification — a 0.90 EMR saves ~10% versus a 1.10 EMR costing ~10% more.
- An independent agent can quote multiple carriers simultaneously and often beats a direct-to-carrier price by 10–25%.
What Workers Comp Actually Covers (and What It Doesn't)
Workers compensation is a two-part policy:
- Part A — Workers Compensation: Pays statutory benefits (medical treatment, lost wages, permanent disability, death benefits) to injured employees regardless of fault. Limits are set by state statute — there is no "per-occurrence limit" you choose.
- Part B — Employers Liability: Protects the business if an employee (or their family) sues the employer for negligence beyond the statutory workers comp remedy. Standard limits are $100,000/$500,000/$100,000 (per accident / policy aggregate / per disease); many contracts require $500,000/$1,000,000/$500,000 or higher.
Key exclusions: Injuries to independent contractors (1099 workers), intentional self-harm, injuries outside the course of employment, and — in most states — injuries to sole proprietors/partners unless they affirmatively elect coverage.
How Workers Comp Premiums Are Calculated
Understanding the math helps you compare quotes honestly:
Base formula:
Premium = (Payroll ÷ 100) × Class Code Rate × Experience Modifier (EMR)
| Factor | What It Is | Your Control |
|---|---|---|
| Class Code (NCCI) | Trade-specific risk rating (e.g., 8810 = Clerical, 5645 = Carpentry, 5551 = Roofing) | Limited — must match actual work |
| Base Rate | Carrier-filed rate per $100 payroll for that class code | Shop carriers via an independent agent |
| Payroll | Total W-2 payroll for the policy period; audited at year-end | Accurate reporting avoids audit surprise |
| EMR (Experience Mod) | Compares your loss history to peers; <1.00 = credit, >1.00 = debit | Improve by reducing claims and near-misses |
| Schedule Credits/Debits | Carrier underwriter adjustments for safety programs, financials, longevity | Strong safety program documentation helps |
| State Surcharges | State assessments layered on top | None |
Workers Comp Cost by Trade — Typical Small Business Ranges
These are illustrative industry-typical ranges. Actual rates vary by state, carrier, and individual risk factors.
| Trade / Class | NCCI Class Code | Approx. Rate per $100 Payroll | Annual Premium — $500K Payroll | Annual Premium — $1M Payroll |
|---|---|---|---|---|
| Clerical (office staff) | 8810 | $0.30 – $0.80 | $1,500 – $4,000 | $3,000 – $8,000 |
| Retail store | 8017 / 8006 | $1.00 – $2.50 | $5,000 – $12,500 | $10,000 – $25,000 |
| Restaurant / food service | 9082 | $2.50 – $5.00 | $12,500 – $25,000 | $25,000 – $50,000 |
| Plumbing / HVAC | 5183 / 5537 | $5.00 – $10.00 | $25,000 – $50,000 | $50,000 – $100,000 |
| Carpentry / general construction | 5645 | $8.00 – $16.00 | $40,000 – $80,000 | $80,000 – $160,000 |
| Roofing | 5551 | $18.00 – $40.00+ | $90,000 – $200,000+ | $180,000 – $400,000+ |
| Landscaping | 0042 | $6.00 – $12.00 | $30,000 – $60,000 | $60,000 – $120,000 |
| Electrical (inside wiring) | 5190 | $4.00 – $9.00 | $20,000 – $45,000 | $40,000 – $90,000 |
Important: Rates shown are industry-typical estimates for illustrative purposes, not guaranteed quotes. Your actual premium depends on your state, carrier, payroll classification accuracy, and EMR.
Best Workers Comp Carriers for Small Business — Compared
| Carrier | Best For | Minimum Payroll / Premium | Strength | Weakness |
|---|---|---|---|---|
| The Hartford | Established small businesses, BOP bundles | ~$5,000 min. premium | Broad appetite, fast COI, strong claim service | May not compete on very small accounts |
| Travelers | Contractors, mid-size small business | ~$5,000 min. premium | Deep construction expertise, robust risk control | Pricing can be firm on high-EMR risks |
| Employers Holdings | Micro-businesses, service trades | No formal minimum | Competitive on micro accounts, fast online bind | Limited appetite for high-hazard construction |
| Pie Insurance | Small contractors, artisan trades | ~$10K annual payroll | Tech-driven, fast quote, competitive in construction | Newer carrier; fewer decades of claim data |
| Next Insurance | Very small businesses, sole props with employees | No formal minimum | Instant digital bind, affordable clerical/service | Less competitive on complex or high-payroll risks |
| CNA | Professional services, white-collar small biz | Varies | Strong employers liability limits available | Less appetite for blue-collar small accounts |
| Markel | Hard-to-place, specialty trades | Varies | Writes risks others decline | Often higher premium |
| State / Assigned Risk Pool | Businesses declined by all standard carriers | Any | Guaranteed coverage | Highest premium; use only as last resort |
Morrow is an independent agency and can place coverage with multiple carriers listed above. [Morrow to confirm which carriers are actively appointed.]
Is Workers Comp Required for Your Small Business?
Most states require workers comp for any business with at least one W-2 employee. Texas is the notable exception, making it elective for most private employers, though most Texas businesses carry it contractually. Several states — including Ohio, Washington, Wyoming, and North Dakota — operate exclusive state funds; you cannot buy a private policy there. [verify state for your specific threshold and fund rules]
Sole proprietors and partners: Typically excluded from your own policy by default but can elect to be included, which may be required by general contractors before you can work on their sites.
1099 subcontractors: Workers comp does not cover independent contractors. However, if a subcontractor is misclassified or lacks their own workers comp, your policy's premium audit may add their payroll to your basis — and your carrier may seek to recover claims costs. Always collect certificates of insurance from subs.
How to Buy Workers Comp Insurance in 6 Steps
- Gather your payroll data by job function. You need 12 months of actual or projected payroll, broken down by the type of work each employee does (not just their title). Mixed-duty employees are rated on their primary function.
- Identify your NCCI class codes. Your agent or a carrier underwriter will assign these, but knowing the likely codes for your trade helps you verify accuracy. Misclassification is the number-one audit surprise.
- Pull your Experience Modification Rate (EMR). If you've had workers comp for at least two years, NCCI or your state rating bureau has calculated an EMR. Request it. A clean EMR below 1.00 is a selling point to carriers.
- Request quotes from at least 3 carriers. Use an independent agent who has access to multiple markets. Provide the same payroll and class code information to each for an apples-to-apples comparison.
- Compare the quote, not just the price. Check employers liability limits, whether the policy includes a waiver of subrogation (often required by general contractors), and the carrier's AM Best rating (A- or better is standard).
- Bind, set up payroll reporting, and calendar the audit. Most carriers offer pay-as-you-go workers comp tied to your payroll processor, reducing audit exposure. Schedule a mid-year payroll review so there are no surprises at year-end audit.
Real-World Example: Plumbing Contractor in Georgia
Business: 6-person plumbing company (owner + 5 field techs), operating in metro Atlanta. Payroll: $420,000 total — $380,000 in Plumbers & Steamfitters (NCCI 5183) and $40,000 in clerical. EMR: 0.95 (slightly below average — a few minor claims in prior years, no lost-time injuries).
Illustrative premium calculation: - Plumbers (5183): ($380,000 ÷ 100) × $7.50 rate × 0.95 EMR = $27,075 - Clerical (8810): ($40,000 ÷ 100) × $0.45 rate × 0.95 EMR = $171 - Estimated base premium before carrier credits: ~$27,246 - After schedule credit for documented safety program (−10%): ~$24,500–$25,000
This business would likely be competitive with Travelers, The Hartford, or a regional carrier in Georgia. A general contractor requiring this plumber on a job site would also demand a waiver of subrogation endorsement and additional insured status — both obtainable from any standard carrier at nominal cost.
This is an illustrative scenario. Actual premiums depend on current filed rates in Georgia, the carrier selected, full claims history, and underwriting review.
FAQ
Do I need workers comp if I only have part-time employees? In most states, yes. The requirement is based on the number of employees, not their hours. Part-time, seasonal, and temporary W-2 workers typically count toward state employee thresholds. [verify state]
What does workers comp not cover? Workers comp does not cover: injuries to 1099 independent contractors, injuries that occur outside the course of employment, intentional self-inflicted injuries, and — in most states — the owner themselves unless coverage is elected. It also does not cover property damage or third-party liability (those belong on a General Liability or Commercial Auto policy).
What is an Experience Modification Rate (EMR) and how do I improve mine? The EMR is calculated by NCCI or your state's independent rating bureau and compares your actual loss history to the expected losses for businesses in your industry with similar payroll. An EMR of 1.00 is average. Below 1.00 saves premium; above 1.00 increases it. Improve your EMR by reporting claims promptly, facilitating return-to-work programs, and building a documented safety culture — frequency of small claims often hurts more than severity of rare large ones.
Can I get workers comp for just one employee? Yes. Many carriers will write a policy for a single employee. Carriers like Employers Holdings and Next Insurance specialize in micro-accounts. Expect a minimum annual premium of roughly $500–$1,500 depending on the trade.
What is pay-as-you-go workers comp? Pay-as-you-go (PAYG) workers comp ties your premium payments to your actual payroll each pay period, rather than requiring a large upfront deposit. Your payroll processor reports payroll to the carrier or a billing hub, and premium is debited accordingly. It reduces cash flow strain and minimizes year-end audit adjustments. Most major carriers offer PAYG for small accounts.
What happens at a workers comp audit? At the end of the policy period (typically annually), the carrier audits your actual payroll against the estimated payroll used to calculate your deposit premium. If your actual payroll was higher, you owe additional premium. If lower, you receive a refund or credit. Audits can be conducted remotely (via payroll records submitted online) or in person for larger accounts.
Does workers comp cover the business owner? Sole proprietors and partners are automatically excluded in most states. Corporate officers may be auto-included or auto-excluded depending on state law. [verify state] Owners who want coverage — for example, because a general contractor requires it — can elect to be included, which adds their payroll to the rating basis.
What's the difference between a waiver of subrogation and an additional insured? A waiver of subrogation means your workers comp carrier gives up its right to sue a third party (like a general contractor) to recover claim costs. An additional insured on General Liability extends policy protections to another party. Workers comp policies do not add additional insureds, but they do issue waivers of subrogation — a common contract requirement on commercial construction jobs.
Why Work With Morrow for Workers Comp
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Multi-carrier access. Morrow is an independent agency, not a captive agent for one carrier. That means we can quote your workers comp across multiple standard and specialty markets simultaneously and advocate for the best combination of price, coverage terms, and employer liability limits for your specific trade and payroll mix.
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Trade-specific underwriting expertise. Workers comp underwriting is highly class-code-sensitive. We know how carriers view specific trades — from artisan contractors to landscapers to restaurant operators — and can help you present your account in the best light, including documentation of safety programs that support schedule credits.
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Fast certificate and COI turnaround. When a general contractor or project owner demands a certificate of insurance or a waiver of subrogation before a job can start, delays cost you money. Morrow handles certificate requests rapidly so your crews aren't sitting idle. [Morrow to confirm turnaround SLA]
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EMR monitoring and claims advocacy. Your EMR directly affects your premium for three years after a claim. We track open claims with your carrier and advocate for timely closure and accurate reserving, which protects your future EMR.
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Bundled coverage review. Workers comp rarely stands alone. We review your General Liability, Commercial Auto, and Umbrella alongside your workers comp to identify gaps, eliminate redundancies, and make sure your employers liability limits align with your GL and umbrella tower.
Get a Workers Comp Quote for Your Small Business
Ready to compare options? Morrow will gather your payroll data, identify the right class codes, and deliver competing quotes from multiple carriers — typically within 1–2 business days for standard small accounts.
Trust strip: Morrow (Afthonea Inc., DBA Morrow) is a licensed independent commercial P&C insurance agency. [Morrow to confirm licensed states and NPN.] We work with A-rated and better carriers. Carriers vary by state and account type.
Related Pages
- Commercial Insurance Overview
- Workers Compensation Insurance — Coverage Guide
- General Liability vs. Workers Comp: What's the Difference?
- How Much Does Workers Comp Insurance Cost?
- Best General Liability Insurance for Small Business
- Workers Comp Insurance for Contractors
Sources
- National Council on Compensation Insurance (NCCI) — class code filings and EMR methodology: ncci.com
- Insurance Information Institute (III) — workers compensation overview: iii.org
- U.S. Department of Labor, Office of Workers' Compensation Programs: dol.gov/agencies/owcp
- State Workers' Compensation Departments / Divisions of Insurance (varies by state) [verify state]
- AM Best — carrier financial strength ratings: ambest.com
- OSHA — workplace safety statistics and injury data: osha.gov