We have known that it is employers who pay for the workers’ compensation insurance. But how much should they pay?

In fact, the cost of workers’ compensation insurance varies from state to state. Different states may use different rates to calculate the cost of compensation insurance. And the rates are based on the job classifications, the frequency of on-the-job injuries and the severity of the injuries that occur. To be more specific, for the employees who work in a safer workplace, employers may pay less to equip their workers with comp insurance. However, if employees work on the roof, or along the railways, enterprises may allocate a great amount of money to buy the comp insurance for their workers.

Who determines the rate? The workers’ compensation insurance companies do it in accordance with the regulations of different states. For example, in California, the cost of insurance for low risk jobs is set only at 1.25 percent per $100 of the workers’ salary. Meanwhile, the insurance companies can also decide discounts and reduced fees which can lower the cost of insurance. When the frequency of on-the-job injuries is predicted to be low, employers can choose an insurance with higher deductible, which means the monthly premiums will be lower.

To sum up, the cost of workers’ compensation insurance is not fixed. It varies in different states and in different workplaces. The cost is set by insurance companies. It is wise for employers to choose, based on the risk of jobs, the most appropriate compensation insurance to protect the rights of both workers and enterprises.

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