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Maine Workers Comp Insurance: Cost, Cheap Quotes, & Requirements

In Maine, almost every employer is required to provide workers compensation benefits to their employees. Workers comp insurance is one the most essential protection for employees in any business, so you should not mess around with it. If you have a business in Maine, you need to get this insurance (with only a very few exceptions). Maine workers comp insurance rates are 16% higher than the national average. 

How much does Maine workers comp insurance cost? 

Insurance companies use a formula that multiplies payroll/100 X class code X experience modification rate to get your 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 Maine 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. 

The average cost of workers comp insurance in Maine is $1.28 per $100 payroll

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. 

How to calculate Maine 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

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 Maine workers comp insurance cost? 

Maine 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 Maine

Below are the three least expensive industries to insure and their class codes in Maine are:

Class codes  Industries  Workers comp insurance rates in Maine 
8810  Clerical — Office employee $0.21 to $0.27 per $100 payroll
8832 Medical Office — Doctor — Dentist — Chiropractor — Optometrist $0.38 to $0.49 per $100 payroll
8742  Sales Professional $0.47 to $0.61 per $100 payroll

Industries with the most expensive workers comp insurance in Maine

Below are the three most expensive industries to insure and their class codes in Maine are:

Class codes  Industries  Workers comp insurance rates in Maine
5551  Roofing Contractors $12.01 to $29.70 per $100 payroll
5645  Residential Construction — Home Builders — Remodelers — Siding $9.19 to $22.73 per $100 payroll
0106  Tree Trimming — Pruning — Removal $7.77 to $19.22 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 residential construction worker getting hurt. 

Keep in mind that these rates are set by the Maine 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, InsurePro, or CoverWallet to compare several quotes to find the cheapest one for your company. 

How to find cheap Maine 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 Maine 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 Maine 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. 

Workers comp insurance requirements in Maine

Every business with employees in Maine is required to purchase workers compensation insurance. 

The state’s workers compensation laws are relatively strict. Maine requires nearly all public- and private-sector employers to secure workers compensation insurance coverage. Maine law defines employers more broadly as:
– private employers
– the state
– counties
– cities
– towns
– water districts
– other quasi-public corporations
– municipal school committees
– design professionals. 

Workers comp insurance exemptions in Maine 

Employers in Maine that are not required to provide workers comp coverage to their workers include:
– Businesses involved in agriculture or aquaculture that employ seasonal or casual workers, as long as they maintain at least $25,000 worth of employers liability insurance and at least $5,000 in medical coverage.
– Employers in agriculture or aquaculture that have six or fewer workers, as long as they have employer’s liability insurance with at least $100,000 in protection for each full-time equivalent employee. They must also have $5,000 in medical payment coverage for each of their workers, as well.
– People who employ domestic workers in their homes. 

In general, you must include yourself on your workers comp insurance policy, with three exceptions:
– Sole proprietors that have no employees
– Parents, spouses, or children of sole proprietors
– Business partners or people who own at least 20 percent of a firm.  

If any of these situations apply, you’re allowed to waive workers comp by making a written request to the state. Members of a limited liability company are allowed to opt out of coverage in Maine and no written waiver is required. The parent, spouse, or child of an LLC member who is also employed by the company may waive the firm’s workers comp insurance requirement by filing a written waiver. 

Penalties for not having workers comp insurance exemptions in Maine 

If you operate your business without workers compensation insurance in Maine, you may be liable for paying medical expenses, lost income, and death benefits out of your own pocket if someone is injured or becomes ill for work related reasons. Lacking insurance does not relieve you of this liability. 

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
  • Prescriptions

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.

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