Workers’ compensation insurance covers employees who are injured or become ill because of their work. It can help pay for medical treatment, a portion of lost wages, rehabilitation, and other benefits related to a covered workplace injury or illness.
It also helps protect businesses from some of the costs that can result from employee injuries. Coverage requirements and benefits vary by state, so the amount of coverage a business needs depends on where it operates, how many employees it has, and the type of work they perform.
Workers’ compensation insurance provides coverage for employees who are injured or become ill because of their work. It can help pay for medical expenses, lost wages, and other costs related to a work-related injury or illness.
This page explains what workers’ compensation insurance costs per state, what it covers, why businesses need it, what it does not cover, how much it costs, and how costs vary by state.
In 49 states, it is an employer’s legal duty to provide worker’s compensation insurance to cover all their employees. Texas is the only U.S. state where private employers are not required by law to provide workers’ compensation insurance to their employees.
The type of work your business does can have a major effect on your workers’ compensation premium. Different jobs also carry different levels of injury risk, so employees may be assigned to different workers’ compensation class codes.
For example, a roofing company may have roofers, salespeople, and office staff. Employees who work on roofs generally face more injury risks than employees who work in an office.
Because of this, it is important to report your payroll under the correct class codes. If all employees are classified as roofers, you could end up paying a higher premium than necessary for lower-risk employees.
These other things also determine the cost of your worker’s compensation policy:
Here are some examples of costs varying based on the level of risk involved:
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As a business owner, you are responsible for ensuring a safe work environment. Accidents can happen even in the most secure settings. That’s where workers’ compensation insurance comes in, offering critical protection for your employees and your business.
Workers’ compensation costs vary by state and can be measured in different ways. The table below shows average monthly premiums from Insureon customers and workers’ compensation costs per $100 of covered wages from the National Academy of Social Insurance. The Insureon figures show the average monthly premium paid by businesses in each state. The NASI figures show total employer workers’ compensation costs as a share of covered wages.
| State | Average Monthly Workers' Compensation Cost | Employer Cost per $100 of Covered Wages |
|---|---|---|
| Alabama | $127 | $0.85 |
| Alaska | $54 | $1.41 |
| Arizona | $59 | $0.62 |
| Arkansas | $59 | $0.57 |
| California | $63 | $1.43 |
| Colorado | $59 | $0.64 |
| Connecticut | $78 | $0.92 |
| Delaware | $52 | $0.88 |
| Florida | $65 | $0.96 |
| Georgia | $61 | $0.82 |
| Hawaii | $54 | $1.62 |
| Idaho | $36 | $1.34 |
| Illinois | $56 | $0.77 |
| Indiana | $62 | $0.57 |
| Iowa | $65 | $1.02 |
| Kansas | $65 | $0.84 |
| Kentucky | $49 | $0.73 |
| Louisiana | $72 | $1.27 |
| Maine | $54 | $1.12 |
| Maryland | $51 | $0.74 |
| Massachusetts | $40 | $0.65 |
| Michigan | $53 | $0.56 |
| Minnesota | $57 | $0.88 |
| Mississippi | $54 | $0.91 |
| Missouri | $86 | $1.01 |
| Montana | $77 | $1.38 |
| Nebraska | $54 | $0.89 |
| Nevada | $53 | $0.87 |
| New Hampshire | $67 | $0.76 |
| New Jersey | $47 | $1.27 |
| New Mexico | $75 | $0.98 |
| New York | $43 | $1.12 |
| North Carolina | $60 | $0.62 |
| North Dakota | $54 | $0.81 |
| Ohio | $54 | $0.58 |
| Oklahoma | $60 | $0.91 |
| Oregon | $60 | $0.97 |
| Pennsylvania | $64 | $1.08 |
| Rhode Island | $54 | $0.91 |
| South Carolina | $84 | $1.16 |
| South Dakota | $54 | $0.88 |
| Tennessee | $57 | $0.60 |
| Texas | $34 | $0.39 |
| Utah | $44 | $0.58 |
| Vermont | $54 | $1.24 |
| Virginia | $46 | $0.48 |
| Washington | $54 | $1.17 |
| West Virginia | $54 | $1.05 |
| Wisconsin | $60 | $1.21 |
| Wyoming | $54 | $1.57 |
Source: Insureon data, updated April 13, 2026; National Academy of Social Insurance data, published August 11, 2026.
Our state guides below provide general information about workers’ compensation and requirements to help you understand the rules that may apply to your business.
Workers’ compensation insurance provides coverage for employees injured on the job. Here’s a breakdown of what this coverage typically includes:
The cost of medical treatment for injuries sustained while working is covered by workers’ compensation.
Example: An employee slips and falls, requiring hospitalization and rehabilitation.
Compensation for lost wages is provided during the recovery period.
Example: An employee cannot work for six weeks after surgery due to a work-related injury.
Additional compensation is available for permanent disabilities resulting from workplace injuries.
Example: An employee loses functionality in a limb after an accident, resulting in ongoing financial support.
Injured employees can receive assistance in returning to work through retraining programs.
Example: An injured worker receives training for a new role that accommodates their limitations.
Financial support is provided to the family of an employee who dies due to a work-related incident.
Example: A family receives compensation after an employee’s death in an accident.
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While workers compensation insurance is critical for workplace safety, it’s important to understand its limitations. Here are some instances where this policy won’t provide coverage:
Injuries caused on purpose by an employee are generally not covered by workers’ compensation.
An employee’s intentional self-inflicted injury is generally not covered by workers’ compensation.
Injuries that happen outside of work or are not related to the employee’s job are generally not covered.
Workers’ compensation does not cover claims related to professional mistakes or negligence. These claims typically require professional liability insurance.
Workers compensation insurance plays a critical role in ensuring your employees receive the necessary support to help cover medical expenses and lost wages.
Workers compensation insurance is essential for protecting both your employees and your business from financial loss due to workplace injuries. It covers medical expenses and lost wages, helping your employees recover without added stress.
Additionally, this insurance is often required in almost all states, allowing you to operate your business with confidence and maintain a good reputation. By investing in workers’ compensation insurance, you demonstrate your commitment to employee welfare.
No, injuries that have occurred outside of work hours or during personal activities outside of the workplace are not covered.
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