More than 884,000 small businesses operates in New Jersey. Collectively, they employ more than 1.8 millions workers. If you run a small business in New Jersey and have any employees at all, including part time and seasonal, you are legally required to have workers compensation insurance for your employees. Without it, you may face criminal charges. So make sure you get workers compensation insurance as soon as you hire the first employee, even just a part-time employee. We discuss the details of requirements and recommend the 4 best workers compensation insurance companies in New Jersey.
- 4 best workers compensation insurance companies in New Jersey
- Workers compensation laws in New Jersey
- What does workers compensation insurance cover?
- What doesn’t workers compensation insurance cover?
- How much does workers compensation insurance cost in New Jersey?
- How to find cheap workers compensation insurance in New Jersey?
- How is workers compensation Insurance different that general liability insurance?
4 best workers compensation insurance companies in New Jersey
We research ~20 companies offering workers compensation insurance in New Jersey and here are our recommendation of the top 4 providers for your consideration.
- CoverWallet: Best for comparing online quotes
- Pie: Best for a fast online quote
- Chubb: Best for medium-sized and big businesses in New Jersey
- Hiscox: Best for small contractors in New Jersey
CoverWallet: Best for comparing online quotes
CoverWallet is a good place to start when you are looking for workers compensation insurance in New Jersey, especially if your main goal is to find coverage at the cheapest price. CoverWallet is a digital broker. They work with several companies.
Once you provide your information, they are able to pull several quotes from their partner companies for you to compare and select the best and the cheapest one for you. The whole process takes less than 10 minutes.
Below is an example of quotes that we receive from CoverWallet for a HVAC contractor located in Jersey City, New Jersey with 6 full time employees and annual payroll of $500,000.
As you can see, they are able to provide three quotes from Guard, AmTrust, and Chubb. Guard’s quote might be the cheapest in this case, but it may not be the cheapest for your company. You need to get your own quotes, compare, and select the best and cheapest one.
Once you’ve got your quote, you can purchase a policy online, or be connected to an agent. After buying a quote through CoverWallet, you can use this digital dashboard to manage your policies 100% digitally. You can download the certificate of insurance, file a claim, or renew the policy, and more.
They recommend other types of business insurance for you, too. They are licenses in all 50 states, so wherever you live, you can get a quote.
Pie: Best for a fast online quote
Pie is an insuretech startup. They aim to modernize the process of buying workers compensation insurance for small businesses. They claim that using machine learning model to underwrite workers comp insurance policies help them offer at least 30% discount to small businesses.
The process of getting a quote and buying a policy from Pie is super fast and simple. Just a few information, you will be able to get a quote and buy a policy only takes a few more minutes.
Although Pie is a startup, their policies are underwritten by Sirius Group, who earns an A- rating by AM Best. This is quite reassuring. They also have good customer satisfaction rating, earning 4.6/5 on Trustpilot with hundreds of reviews and ratings.
Chubb: Best for medium-sized and big businesses in New Jersey
Chubb is very established business insurance company. They have been around for decades and earned a great reputation.
They have superior financial rating (A++) from AM Best and ranked first in the 2020 small business commercial insurance survey by J.D. Power.
Chubb offers all types of business insurance policies that you can think of, including workers compensation. They serve businesses in all industries and of all sizes. You can choose to engage with them digitally or through an agent.
Hiscox: Best for small contractors in New Jersey
Hiscox is another established insurance company specializing in business insurance. They are also the pioneer offering business insurance online. They have excellent financial strength rating (A) by AM Best and a lot of experience in selling and servicing business insurance policies.
Hiscox is focused on serving small businesses. They offer great digital capabilities: customers can get quotes online very fast; buy policies online; and manage the policies completely digitally as well. Customers also have access to their agents.
They offer workers compensation insurance and other small business insurance policies such as general liability, professional liability, BOP, commercial property insurance, product liability, etc.
Hiscox caters to small businesses in all industries. However, they seem to have an emphasis on contractors with customized policies for different types of contractors such as carpenters, electricians, painters, HVAC, construction, roofers, etc.
>>MORE: 10 Best Workers Compensation Insurance Companies for Small Businesses
Workers compensation laws in New Jersey
Employers in New Jersey are required to provide workers compensation benefits to employees. This includes part-time or seasonal employees. It also applies to businesses that operate as LLC’s. You’ll have to pay fines of up to $5,000 for every 10-day period that you don’t have it and eventually can face criminal charges. The only exceptions are:
- Unpaid volunteers or interns
- Independent contractors
- Workers covered by federal programs
In 2020, New Jersey governor Murphy signed a law that said essential workers who contracted Covid-19 would qualify for workers compensation benefits.
If you run a small business in New Jersey, you must have workers compensation insurance. The risk of not having it is so high that it is not worth it.
What does New Jersey workers compensation insurance cover?
Workers compensation insurance protects your employees just in case they are injured on the job. It covers:
- Medical expenses
- Death benefits
- Missed wages
- Lawsuits
- Vocational training
Vocational training covers education if your employee can no longer do the job they were hired to do.
Workers compensation will cover your court costs and any settlements if the injured employee decides to sue you. If the worst happens and an employee dies while on the job, workers compensation n covers the funeral and burial expenses. It also provides a settlement to the victim’s family.
Keep in mind that diseases employees were exposed to while at work can also be covered under workers compensation. Carpal tunnel syndrome for office workers and black lung disease for coal miners are two well-known occupational hazards that can be covered by workers compensation insurance.
What doesn’t workers compensation insurance cover?
Workers’ compensation doesn’t cover everything. It won’t cover:
- Independent contractor injuries
- Client injuries
- Employees who are intoxicated or high
- Wages for temporary workers while the worker recovers
- OSHA fines
- Injuries that occur after the employee has left work (assuming they’re not doing something under the scope of employment)
- Vandalism or intentional injuries
How much does workers compensation insurance cost in New Jersey?
The cost of workers compensation insurance varies according to:
- Amount of payroll
- Claims history
- Number of employees
- Coverage limits
- Location
- Level of risk
If you want to calculate your workers compensation costs in New Jersey, it’s $1.42 per $100 of payroll on average. You then multiply this by class code, which is how the insurance industry categorizes workers, and then that’s multiplied by an experience modification rate, which is how your business compares to other businesses. Costs of workers compensation insurance tend to go down over time because of experience, unless you have a claim.
If you want to reduce the cost of workers compensation insurance for your business, make sure you shop around with at least 3 companies or with a digital broker like CoverWallet to compare several quotes and select the cheapest one for you.
How to find cheap workers compensation insurance in New Jersey?
Finding cheap workers’ compensation insurance in New Jersey really depends on your claims history and your payroll. It’s always possible to find different rates, especially if you choose an insurer that focuses solely on covering workers’ compensation, like Pie Insurance.
Make sure to shop with at least 3-5 companies or a digital broker like CoverWallet to compare several quotes before selecting the cheapest one for you. Different insurance companies will provide you with different rates, so always shop around to compare.
It can also pay to ask about any discounts on the insurance policy with an agent. Some insurance companies will provide discounts for having safety policies and return-to-work policies in place. You may also get a discount if you choose to bundle multiple insurance policies with the same insurer.
Lastly, the cost of worker compensation insurance depends on the classification codes of your employees. Construction workers have much more expensive workers compensation insurance than clerical workers, so make sure you classify your employees into the correct codes and remember to update the codes when your employees change the nature of their work.
>>MORE: The Cheapest Workers Comp Insurance Companies
Who are exempt from workers comp insurance in New Jersey?
All companies in New Jersey are required to have workers comp insurance. The following are exempt from having workers comp insurance coverage:
- Unpaid volunteers or interns
- Independent contractors
- Workers covered by federal programs
Penalties for failure to have workers comp insurance in New Jersey
Failure to provide workers comp insurance to employees can result in significant consequences, even there are no work-related injuries. If proven to be willful, companies can be considered to commit a crime of the fourth degree. Penalties can be accessed up to $5,000 for the first 10 days, and another $5,000 for each additional 10-day period failure to insure.
How is workers compensation Insurance different that general liability insurance?
Workers compensation insurance only covers people who work for you. If your client or a customer or even a random passerby is injured on your jobsite, general liability insurance will cover that. General liability covers bodily injury and third-party property damage against you, the business owner.
Workers comp insurance for independent contractors in New Jersey
As mentioned above, independent contractors in New Jersey are actually exempted or not required to have workers comp insurance. However, as an independent contractor, especially in a risky industry like construction or handyman, you should still have the coverage to protect yourself in case you are injured or become ill at work.
Getting workers comp insurance for independent contractors is quite straightforward and fast. We recommend the best workers comp insurance companies for independent contractors for your consideration.
The cost of workers comp insurance for independent contractors depends on the type of work you do. An accountant independent contractor will pay a lot less for workers comp insurance coverage than a handyman or a roofer independent contractor. You should shop around with a few providers or with a digital broker to compare several quotes before making your final decision.
Last thoughts
Although no one wants to pay a lot of money for workers compensation insurance, the cost of not having it is exponentially more. Make sure you run a safe workplace, and hopefully you won’t have any claims filed against you.
