Cheap Workers' Comp

How to Save Money on Workers’ Compensation Insurance

Workers’ compensation insurance is a must-have for business owners. It’s the safety net that helps cover medical bills and lost wages when employees get hurt or sick on the job. But let’s face it: the cost can feel overwhelming. On average, businesses pay about $2.30 per hour worked per employee, which adds up fast. The good news? There are simple ways to save on workers’ comp without cutting corners. Let’s break it down.

Think of it like shopping at a wholesale club—buying in bulk can save you big bucks. Many industry or trade associations offer group discounts for workers’ comp insurance. You don’t have to have a massive team to qualify; joining an association with at least 300 members might do the trick. These groups often negotiate better rates for businesses with similar risks. Check around and see if there’s a trade group in your industry that offers this perk.

Ask Your Insurance Agent for Help

Your insurance provider and agent aren’t just there to bill you; they’re also a resource. Invite your agent to your workplace to help identify potential safety hazards. Once you’ve addressed those risks, document what you’ve done and welcome regular reviews. Insurers love seeing proactive business owners, and your efforts could lead to lower premiums.

Create a Safety Program

Having a written safety program isn’t just a good idea—it’s a money-saver. Some states even require it. For every dollar you spend on preventing workplace injuries, studies show you can get a $2 to $6 return on investment.
Here’s what to include in your safety program:

• Regular training: Teach your team how to stay safe on the job.
• Signed materials: Have employees sign off on safety documents to show they understand the rules.
• Rewards: Offer incentives for employees with strong safety records.

Need inspiration? Check out the OSHA website for industry-specific safety tips.

Bring Injured Employees Back Quickly

Accidents happen, but how you handle them can save you money. A return-to-work program helps employees ease back into their roles after an injury, even if it’s part-time or with lighter duties. This keeps claims from dragging on and costing you more. Plus, it shows your employees you care about their well-being.

Keep Drugs and Alcohol Out of the Workplace

Substance abuse doesn’t just create safety risks—it also drives up costs. Workers who use drugs or alcohol on the job are twice as likely to file workers’ comp claims. Consider making pre-employment drug testing mandatory, and think about random testing for current employees. It’s a small step that could save you a lot.

Double-Check Job Classifications

Here’s one way businesses might accidentally overpay: using the wrong job codes. Workers’ comp premiums are calculated based on the type of work employees do, and some jobs are riskier—and pricier—than others. For example, if you’re running a restaurant, don’t classify your clerical staff as kitchen workers. Audit your classifications regularly to make sure everyone is listed under the right code. It’s a simple way to avoid paying more than you need to.

Don’t Overreport Minor Injuries

Not every scrape or bruise needs to be reported as a workers’ comp claim. Train your employees to understand the difference between minor injuries—like small cuts or bruises that can be handled with first aid—and serious incidents that need to be reported. Fewer unnecessary claims mean better rates for your business.

Compare Insurance Rates

Just like shopping for a car or a new phone plan, it pays to shop around. Don’t stick with the first workers’ comp quote you get. Use a comparative quoting website that compares multiple options to find the best combination of coverage and cost. There are online tools and insurance brokers that make this process quick and easy—like Pogo Insurance!

At Pogo Insurance, we simplify the process with one single application that gives you access to top insurance companies. The best part? It doesn’t cost you a penny extra to work with us. You’ll pay the same as if you went directly to the insurance company, but with the added bonus of our specialists guiding you through the options. We compare all major insurance providers and commercial lines in one go, so you can make the best choice for your business. Get a free estimate for workers’ comp.

Pick the Right Payment Plan

Many insurance providers let you choose between monthly and annual payment plans. While monthly payments might feel easier on your budget, paying annually can often save you money in the long run. Weigh the options to see what works best for your cash flow.

Consider Excluding Yourself

If you’re a sole proprietor, you may be able to exclude yourself from workers’ comp coverage, depending on your state’s laws. Doing this can lower your premiums, but it also means you won’t have coverage if you get hurt on the job. Make sure to weigh the risks before deciding.

If you have no employees, you could consider excluding yourself with an owner-only minimum premium ghost policy. Learn more about owner-only ghost policies.

Know the Difference Between Employees and Contractors

Misclassifying workers can cost you big time. If you call an employee a contractor to save on taxes and insurance, you could face hefty fines and back payments if you’re caught. On the flip side, if you classify a contractor as an employee, you’re paying extra for coverage you don’t need. To avoid confusion:

• Employees usually follow your schedule and use your tools.
• Independent contractors typically set their own hours, bring their own equipment, and work for multiple clients.

Learn more about the ins and outs of hiring subcontractors, or getting hired as a subcontractor, with our Subcontractor Insurance Requirements Guide.

Saving Money

Cutting your workers’ comp costs doesn’t mean cutting corners. By focusing on safety, using accurate classifications, and shopping around for the best rates, you can save money while keeping your team protected. Take these steps, and you’ll see how affordable workers’ comp can be. Ready to get started? Grab a free quote and see how much you can save.