Small businesses in Indiana should have workers comp insurance because it can protect them from costly injuries that can occur at the workplace. According to the Indiana Department of Labor, in 2019 there were over 27,000 workplace injuries and illnesses reported in the state. These injuries resulted in over $1.2 billion in lost wages and $192 million in medical expenses. Workers comp insurance can help businesses cover these costs if an employee is injured on the job.
We cover what you need to know about workers comp insurance requirements for small businesses in Indiana, how much it costs, and where you can find cheap quotes for your business in this article.
- Workers comp insurance requirements in Indiana
- Workers comp insurance exemptions in Indiana
- How much does Indiana workers comp insurance cost?
- How to calculate Indiana workers comp insurance cost?
- How to find cheap Indiana workers comp insurance?
- Get Indiana workers comp insurance quotes online from brokers
- Get Indiana workers comp insurance quotes online from insuretechs
Workers comp insurance requirements in Indiana
Indiana law requires all employers to provide workers’ compensation coverage. By law, every employer and employee must accept workers’ compensation.
Workers comp insurance exemptions in Indiana
The following are some Indiana workers that are exempt from employer-provided workers’ comp: athletes on scholarship; coaches for youth sports teams; IRS-defined independent contractors; members of Indiana municipal fire and their pension funds; members of the police department and their pension funds; prison inmates; train workers; volunteers; interstate or foreign workers with access to federal workers’ compensation (seamen, longshoremen, etc.); and real estate employees.
Penalties for not having workers comp insurance exemptions in Indiana
Employers that do not provide workers comp in Indiana commit Class A infractions. The WC Board could issue the following orders to punish this offense: fines up to $10,000; compensation up to twice the amount of fines; the employer may cease operations in Indiana until proof of insurance is provided; medical expenses for the wounded employee; and reasonable legal fees.
How much does Indiana workers comp insurance cost?
The average cost of workers comp insurance in Indiana is $0.68 per $100 payroll. This means that if you company’s annual payroll is $100,000, you should pay an average of $680 per year for workers comp insurance.
Workers comp insurance cost varies significantly by company depending on several factors that we discuss the details below.
Keep in mind that this is just the average. Your rates will be different. You should shop around with a few companies or work with 1 or 2 brokers to compare several quotes. Comparing quotes is the only way to make sure you can get the cheapest rates for your company.
We recommend the following options:
- Get an online quote from biBERK and THREE. They are known for low-cost coverage and their online quoting experience is fast and simple
- If you want to compare several quotes in one place, we should work with Simply Business or CoverWallet. They allow you to get and compare several quotes from the top carriers in one place easily.
- If you prefer working with an agent, we recommend Tivly or Smart Financial. They have an extensive network of agents who are knowledgeable and experienced
How to calculate Indiana workers comp insurance cost?
Workers compensation rates vary by industry, how much experience you have in your industry, and payroll. There’s a formula you can use to figure it out:
Class code X Payroll/100 X Experience modification rate = Premium
- Payroll is factored in since the more you pay, the more employees you have, and that’s more people who could potentially become injured (according to insurance companies, anyway).
- Experience modification rate is the only factor you have any control over. It basically compares your history of workers compensation claims with claims from other companies in similar industries. The longer you’re in business without having to file a workers compensation claim, the lower your rate will be. Experience modification rates (EMR) are somewhere between 0.75 and 1.25. An EMR over 1.0 means you’ll spend more for workers comp, and an EMR below 1.0 means less expensive rates.
- Class codes are four digit numbers that are assigned to each industry, set by the Indiana Department of Insurance. Each code has a corresponding dollar amount which is what you pay per $100 of payroll. Some industries are more expensive to insure than others.
This will only get you a rough estimate of how much you’ll pay, but it should give you an idea. Only insurance companies can give you the final rates for your company.
What factors impact Indiana workers comp insurance cost?
Indiana workers comp insurance cost varies by several factors as follows:
- Your industry: Your four digit class code–is the biggest factor affecting your workers compensation premiums.
- Your payroll: Payroll is also a factor, although it’s actually based on projected payroll. One way to save money on workers compensation insurance is to get a pay-as-you-go policy, because those rates are determined by your actual payroll. So, in other words, you won’t be paying for workers who are on vacation, have been fired, or are yet to be hired.
- Your claims history also affects your rates. If you’ve never had a workers comp claim, your experience modification rate will be lower and then you’ll pay less. Safe workplaces pay less in workers compensation insurance over time.
- Your location: Insurance rates always vary by state. Some states have higher rates and others are lower.
Industries with the cheapest workers comp insurance in Indiana
Below are the three least expensive industries to insure and their class codes in Indiana are:
|Class codes||Industries||Workers comp insurance rates in Indiana|
|8810||Clerical-Office Employee||$0.12 per $100 payroll|
|8742||Sales Professional||$0.18 per $100 payroll|
|8832||Medical Office- Doctor- Dentist- Chiropractor- Optometrist||$0.18 per $100 payroll|
Industries with the most expensive workers comp insurance in Indiana
Below are the three most expensive industries to insure and their class codes in Indiana are:
|Class codes||Industries||Workers comp insurance rates in Indiana|
|106||Package & Parcel Delivery||$5.45 per $100 payroll|
|5551||Roofing Contractors||$5.47 per $100 payroll|
|5645||Residential Construction-Home Builders-Remodelers-Siding||$4.16 per $100 payroll|
What this means is that the insurance companies have concluded with years of historical data that an office worker’s chances of becoming injured on the job are just a fraction of the chances of a roofing contractor or a package drivery worker getting hurt.
Keep in mind that these rates are set by the Indiana Department of Insurance. Final rates are provided by the insurance companies that you shop with. They can offer discounts, dividends, and credits to policyholders. So your final rates will be different. Be sure to shop around with a few companies or work with a top broker like Simply Business or CoverWallet to compare several quotes to find the cheapest one for your company.
How to find cheap Indiana workers comp insurance?
The easiest way to save money on workers compensation insurance is to shop around. Just spending a few hours obtaining quotes from several insurance companies could save you hundreds of dollars.
Another way to save money, as we mentioned above, is to choose a pay-as-you-go workers compensation policy. This way, you’ll only pay for employees that are actually working for you that week, instead of an estimate of how many people are supposed to be working.
Make sure your business emphasizes safety and a safety program is posted where everyone can see it. You’ll pay a lot more in the future if you have to file a claim.
Get Indiana workers comp insurance quotes online from brokers
Online brokers are not insurance companies, but rather, they partner with various insurance companies to be able to offer you several online quotes from their partner companies. Some online brokers include:
- Simply Business: Best for finding low-cost coverage
- InsurePro: Best for flexible short-term coverage, ie. you can get coverage for a couple of days or weeks.
- CoverWallet: Best for comparing several quotes online
- CommercialInsurance.net and Smart Financial: Best if you prefer working with an agent. Their agents are independent agents, ie. they can get quotes from several insurance companies
Online brokers often work with different insurance companies. So it may be worth giving them all a try to get as many quotes as you could. Comparing several quotes is the only way to find the cheapest one for you.
Get Indiana workers comp insurance quotes online from insuretechs
Online “insuretech” companies are insurance companies that operate completely online. They tend to be newer companies and have been founded in the digital age. So, they tend to offer a much better digital experience. They all sell workers comp insurance directly to businesses and tend to have lower rates. You can get a quote, file a claim, receive a certificate of insurance and pay your bill, all online, and within 10-15 minutes.
Some such companies include:
- biBERK: Best for low-cost coverage. biBERK is a subsidiary of Berkshire Hathaway and claims that they could save you at least 20% on premiums
- THREE: Best for simple and comprehensive policy with affordable rates. THREE is another Berkshire Hathaway’s subsidiary. They believe that each small business insurance should have all coverage that they need in a policy document of less than 3 pages.
- Pie: Best for comprehensive industry coverage. Pie has made rapid progress to expand their coverage to a wide range of industries. If you couldn’t get quotes for your company at biBERK or THREE, you may want to give Pie a try.
biBERK gave us this quote for a computer software business with five employees and $500,000 in payroll.
Of course, you may get a different quote, even for a business with similar attributes. But it’s usually pretty easy to get a quote from an online insuretech company, so you have nothing to lose (except a few minutes’ time) by getting a quote.
What does workers comp insurance cover?
Workers compensation insurance provides employees with benefits in case they are injured on the job, and it provides employers with some protection from lawsuits filed by injured employees.
Workers compensation provides employees with payments for:
- Medical bills
- Doctors visits
- Hospital stays
- Physical therapy
In addition, employees are entitled to receive benefits for lost wages. They can also collect for temporary disability benefits, either total disability if the employee can’t work at all, or partial temporary disability benefits if they can work but with restrictions (not lifting anything over 20 lbs, restricted to desk duty, etc).
If the employee is permanently disabled, workers compensation will provide them with benefits. Should the worst happen and an employee is killed, workers comp provides death benefits and funeral costs.