How Much Does MA Workers' Compensation Insurance Cost?

Workers’ compensation is a scary term for many business owners. 

For one, the thought of an employee being injured on the job and missing work is troubling. But knowing you are required to pay for MA workers’ comp is also a scary thought, especially if you have no idea what you can expect to pay. 

But we can help with that! At Berry Insurance, we’ve issued thousands of workers’ comp policies for businesses of all types in Massachusetts and beyond. So we’re pretty familiar with what goes into determining the cost of a policy in general.

In this article, we’ll give you an estimate of what workers’ comp can cost, get into the factors that influence it, and give some real examples of insurance premiums for Massachusetts business owners.

Table of contents: 

• MA workers' comp cost
• Factors that influence MA workers’ comp cost
• MA workers’ comp premium examples

MA workers’ comp cost

Workers’ compensation insurance is regulated in Massachusetts, meaning that it will cost the same from any insurance agent or company you choose to work with. However, it still does vary business to business.

Because it does vary so significantly based on several factors (which we’ll get into below), it’s impossible to give you an accurate estimate. 

But we can give you a rough estimate based on what we usually see for premium prices.

Annual workers’ comp premiums range anywhere from $218 for a basic nanny policy or to $100,000 or more for large corporations with higher-risk operations.

Factors that influence MA workers’ comp cost

The cost of each workers’ comp premium will vary from business to business based on several factors. Here’s what you can expect to play a role.

Industry/business operations 

Your industry and your company’s business operations and job duties also play a role in the cost of your workers’ compensation.

In industries such as construction, landscaping, manufacturing, HVAC, basically anything physical, there is a much greater risk of employee injury. Therefore, its premium will be higher than companies in industries with less risk.

Insurance carriers use classification codes (which each have their own rates) to classify business operations by risk.

Total payroll

Once the carrier determines your classification codes they use a mathematical formula to multiply classification rates by payroll, which helps determine your premium.

Workers’ comp will cost you more the higher your company payroll is. 

Workers’ comp limits:

Each type of insurance has limits. These amounts are the total amount the insurance carrier would pay out if you were to have a claim.

And each policy actually has several different limits corresponding with the separate coverages within the policy.

For example, workers’ comp has limits for Workers’ Compensation, Each Accident, Disease Policy Limit, and Disease Each Employee.

Generally, with higher limits, you can expect a higher cost.

Prior claims/experience modification rating

Just like with any other type of insurance, if you’ve had prior workers’ comp claims, it will increase your premium.

For workers’ compensation, this is calculated using something called an experience modification rating (EMR) (sometimes called experience modification factor). 

An experience modification rating is a metric used to calculate a company’s workers’ compensation risk, based on their number of claims and the claim costs over a three-year period. (the last three years, minus the most recent).

It’s kind of like a credit score for workers’ comp!

The number represents a ratio of a company’s cost of workers’ compensation claims compared to companies of similar size and industry.

Essentially, it portrays the risk of insuring or working with your company, compared to your competitors.

Generally, if your number is above 1.0, that means you have a greater risk than your competitors of having a workers’ comp claim.

For more information, check out this article: Your Experience Modification Rating (EMR) Factor and How it Affects Your Workers’ Compensation Insurance.

Additional coverages

Depending on your specific business and needs, you may need to include some additional coverages on your workers’ compensation, and in most cases, they will come at an additional cost.

Some of these additional coverages could include Waiver of Subrogation (due to contractual requirements), foreign coverage, USL&H, operations in other states, coverage for volunteers

Whether owners are included:

Oftentimes, including business owners on a workers’ comp policy is optional.

In MA, officers of corporations are automatically covered, while sole proprietors, members of LLCs or partnerships must opt in for coverage. Corporate officers can elect to be excluded though.

Workers’ comp policies will be more expensive if owners are included.

MA workers’ comp premium examples:

You know the factors that influence price, but you probably still don’t have a clear idea of what exactly that means for your business.

So to help give you some more insight, we’ll give you some specific examples of some of the workers’ compensation policies we’ve issued recently.

• An HVAC contractor in Norfolk, MA with $1M/$1M/$1M limits, $655,000 payroll = $16,001 per year
• A florist in Salem, MA with $1M/$1M/$1M limits, $63,200 payroll = $1,260 per year 
• A sushi vendor in Fall River, MA with $1M/$1M/$1M limits, $16,000 payroll = $330 per year
• A court reporter in Norfolk, MA and Texas with $100,000/$500,000/$100,000 limits, $64,800 payroll = $266 per year
• An arborist in Norfolk, MA with $100,000/$500,000/$100,000 limits, $319,033 = $24,371 per year

Keep your workers' comp costs down

As we mentioned, workers’ comp rates are set by the state and should cost the same no matter which insurance carrier you work with. However, that doesn’t always necessarily mean you’re getting the right price.

Workers’ compensation policies are very complex. And if we’re being honest, some insurance agents don’t ask the right questions or set your policies up in the correct way and this could cause you to be paying more than you should.

In fact, by correcting some of these issues, we’ve been able to save some of our clients thousands of dollars on their workers’ compensation policies.

To learn more about what these issues are and how you can correct them to save you money, read this article: How to Avoid Being Overcharged for Workers’ Compensation.