Employees
Workers' Compensation Insurance
Benefits required by state law for employees hurt on the job, plus employers liability, with premium based on payroll and job classifications and checked by an audit.
Workers' compensation provides benefits set by state law, such as medical care and wage replacement, for employees injured or made ill by their work. The same policy usually includes employers liability, which can respond to certain lawsuits tied to employee injuries.
Most states require employers to carry workers' compensation, but the rules differ on which employers and workers must be included, how owners are treated and where coverage can be bought. We help employers across the U.S. sort through those rules and confirm what applies to your business.
Premium is driven by payroll, classification codes (codes that group similar kinds of work) and your claims experience, and it is adjusted after the term through an audit. Getting the classes right, collecting subcontractor certificates and understanding your experience mod can make a real difference at audit time.
Employees in more than one state
Each state sets its own workers' compensation rules. If employees live, travel or work in more than one state, tell us where they work and how often, so the policy can address each state.
States where you regularly have employees usually need to be listed on the policy. In North Dakota, Ohio, Washington and Wyoming, workers' compensation is generally obtained from a state fund rather than from private insurance companies. Employers liability for work in those states may need to be arranged separately, often called stop gap coverage.
Insurance options depend on your business, location, licensing requirements and carrier availability.
What's typically included
Exact coverage depends on the policy form, endorsements and insurance company.
Part One — workers' compensation
Benefits required by the applicable state's law, such as medical care, wage replacement, disability and death benefits.
Part Two — employers liability
Protection for certain lawsuits related to employee injuries, such as third-party-over actions or claims by family members, up to the limits shown on the policy.
Part Three — other states insurance
Can apply if you begin work during the policy term in a state listed in item 3.C of the policy's information page (the "other states" list). It doesn't replace listing the states where you already have operations (item 3.A), and it doesn't apply in state-fund states.
Owner and officer elections
Depending on your entity type and state rules, owners, partners and officers may be included or excluded, which affects both their benefits and the premium.
Contract endorsements
Waiver of subrogation and alternate employer endorsements that many contracts and staffing arrangements require.
Federal and maritime exposures
Work on docks, near navigable waters or on certain federal projects may need endorsements beyond a standard policy, such as U.S. Longshore and Harbor Workers' (USL&H) coverage.
What to watch for
- Payroll in the wrong class code, which can lead to large audit adjustments or disputes.
- Subcontractors without a valid certificate. An auditor may add their payroll or contract cost to your premium.
- Owner or officer exclusions you didn't intend, or inclusions that add premium you didn't expect.
- Employees regularly working in states not listed on the policy, including North Dakota, Ohio, Washington and Wyoming, where coverage generally comes from a state fund.
- 1099 workers (independent contractors) who may be treated as employees for workers' compensation purposes, depending on state rules.
- Experience mod errors: incorrect payroll or claim reserves can push your mod up, so review the worksheet each year.
What affects price and eligibility
- Payroll by classification code
- Experience modification factor based on prior payroll and claims
- States where employees work
- Use of subcontractors and the quality of your certificate records
- Safety programs, return-to-work practices and claims management
- Owner and officer elections and any required endorsements
Helpful information for a quote
Have what you can — we'll ask for anything else an insurance company needs. Starting a new business? You can begin without prior policies or loss runs.
- Payroll by job type and state: last year's actual and an estimate for the coming year
- Number of employees with job descriptions and duties
- Experience modification worksheet, if you have one
- Current declarations page and loss runs (claims history reports) for the last 3–5 years, if you've been insured before
- Subcontractor list and their certificates of insurance
- Owner and officer names, ownership percentages and whether each wants to be included or excluded
Who typically needs it
- Businesses with employees, including part-time and seasonal staff
- Contractors with field crews or subcontractors who may not carry their own coverage
- Trucking companies with employed drivers, dispatchers, mechanics and yard staff
- Restaurants, retailers and service businesses with hourly staff
- Manufacturers and wholesalers with warehouse, production or delivery workers
- Businesses with employees who travel or work in other states
Talk it through with an agent
Not sure what you need? Start a request and choose "Not sure" — a licensed ALP agent will talk through the options with you.
Request a workers' compensation quoteWorkers' Compensation FAQs
Is workers' compensation required in New Jersey?
In New Jersey, most employers must carry workers' compensation; we'll help you check what applies to your business. Other states set their own rules, especially for owners, very small employers and certain types of workers.
What if I have employees working in another state?
The policy needs to address each state where employees work. Other states insurance can help with new or temporary work, but ongoing operations usually need that state listed, and North Dakota, Ohio, Washington and Wyoming generally require coverage through their state funds.
What is an experience mod?
An experience modification factor compares your claims history with other businesses in the same class codes and adjusts your premium up or down. A rating bureau calculates it using several years of payroll and loss data.
Why did I get a bill after my policy ended?
Workers' compensation is rated on estimated payroll and audited after the term. If actual payroll was higher, shifted into a higher-rated class, or uninsured subcontractor costs were found, an additional premium can be due.
Can I exclude myself as an owner or officer?
Often, depending on the state and your entity type. Excluding yourself can lower premium, but it generally means you would not receive workers' compensation benefits if you are hurt on the job.
Related coverage
General Liability
Protection for claims that your business injured someone or damaged their property — often the first policy a landlord, client or general contractor asks to see.
Umbrella & Excess
Extra liability limits above your general liability, commercial auto and employers liability policies — often how businesses meet higher contract or lease requirements.
Employment Practices
Protection for employee claims of wrongful termination, discrimination, harassment or retaliation — exposures any employer can face, whatever its size.
Commercial Auto
Protection for the vehicles your business owns or leases, plus liability options for vehicles you rent and for employees' own cars used for work.