Workers' compensation insurance is a crucial pillar of employee protection, offering essential support to employees who are injured or become ill due to their work.
What is Workers' Compensation Insurance?
Workers' compensation is no-fault insurance that provides medical benefits and wage benefits to employees who suffer work-related injuries or illnesses.
Legal Requirements by State
Requirements vary significantly by state:
- Almost all states require coverage (Texas is the exception)
- Some states require coverage from the first employee
- Industries like construction may have stricter rules
What's Covered
- Medical expenses
- Lost wages (disability benefits)
- Vocational rehabilitation
- Death benefits
Premium Calculation
Premiums are calculated using: (Payroll / 100) x Classification Rate x Experience Modifier. Average monthly cost in 2025 is approximately $45.