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Pennsylvania Workers Comp Insurance Laws, Cost, & Cheap Quotes

Small businesses in North Carolina need workers’ compensation insurance to protect their workers in the event of an on-the-job injury. According to the North Carolina Department of Labor, there were more than 152,000 workplace injuries and illnesses reported in 2021. That’s an average of more than 410 injuries every day. The most common types of injuries were musculoskeletal disorders, followed by contact with objects and equipment. Workers’ compensation insurance can help cover the costs of medical treatment for injured workers, as well as income replacement benefits if they are unable to work while they recover.

We discuss what you need to know about workers comp insurance requirements in Pennsylvania, how much it costs, and where to find cheap workers comp insurance quotes for your business.

Workers comp insurance requirements in Pennsylvania

In Pennsylvania, most business owners are required to purchase workers comp coverage if they have any employees. 

Workers comp insurance exemptions in Pennsylvania 

Businesses with no employees are generally able to go without coverage. Sole proprietors and partners are not required to get workers comp in Pennsylvania, but they can choose to purchase a policy. 

Corporate officers are automatically included in workers compensation coverage in Pennsylvania, but may choose to not get it. Limited liability company (LLC) members aren’t mandated to get workers compensation protection for themselves. However, their employees must be covered as required by law.  

Penalties for not having workers comp insurance exemptions in Pennsylvania 

The state’s Bureau of Workers Compensation actively goes after uninsured employers in Pennsylvania. 

If workers compensation insurance is not in effect as required, the bureau could file charges. The charges could result in fines of up to $2,500 and up to one year in prison for each day a small business owner is in violation. 

If an employee is injured or becomes ill when there’s no workers comp coverage in effect, the employer is responsible for all expenses associated with the incident including medical costs, lost wages, interest, and fees. Workers may also sue employers for damages if they don’t have a workers compensation policy. 

Any Pennsylvania resident or business can request district attorney approval to file a private criminal complaint against any employer who doesn’t have workers comp coverage and is legally required to. 

How much does Pennsylvania workers comp insurance cost? 

The average cost of workers comp insurance in Pennsylvania is $1.26 per $100 payroll. So, if your total payroll is $200,000, you should expect to pay around $2,520 per year for your workers comp insurance.

The cost varies significantly from one business to another depending on several factors which we are discussing 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 or THREE, they are known for low-cost coverage.
  • If you want to compare several quotes in one place, we recommend comparing online quotes with Simply Business or CoverWallet, they are the two best digital brokers that offer online quote comparison.
  • If you prefer working with an agent, we recommend contacting Tivly or Smart Financial. Their agents are very knowledgeable and experienced.

How to calculate Pennsylvania 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 Pennsylvania 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 Pennsylvania workers comp insurance cost? 

Pennsylvania 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 Pennsylvania

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

Class codes Industries Workers comp insurance rates in Pennsylvania 
0953 Clerical — Office employee$0.08 per $100 payroll
0951Sales Professional$0.20 per $100 payroll
0954 Medical Office — Doctor — Dentist — Chiropractor — Optometrist$0.27 per $100 payroll

Industries with the most expensive workers comp insurance in Pennsylvania

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

Class codes Industries Workers comp insurance rates in Pennsylvania
0659 Roofing Contractors$11.36 per $100 payroll
0005 Tree Trimming — Pruning — Removal$8.02 per $100 payroll
0652 Residential Construction — Home Builders — Remodelers — Siding$6.73 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 Pennsylvania 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, CoverWallet, or Tivly to compare several quotes to find the cheapest one for your company. 

How to find cheap Pennsylvania 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 Pennsylvania 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 
  • CoverWallet: Best for comparing several quotes online
  • Tivly 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 Pennsylvania 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
  • 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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