What Is Worker’s Compensation Insurance, and Why Is It So Important?  

If you are a business owner, you are probably curious about worker’s compensation insurance. We’ve got answers.

What Is Worker’s Compensation Insurance?

Worker’s compensation insurance is, at its most basic form, compensation for employees or independent contractors for damages sustained while conducting business on a company’s behalf. If someone is hurt, sick, or falls ill during work or because of the business, they can be compensated for the financial strain it poses.

It is common to have worker’s compensation insurance for 1099 contractors, full-time employees, and other service people within the company.

How Much Is Worker’s Compensation Insurance?

A few key factors determine a small business’s average cost of worker’s compensation insurance.


The average cost of worker’s compensation insurance for a small business varies depending on the risk level of your business. Less risky enterprises will have lower worker’s compensation insurance premiums, as the chance of accidents or injuries on the job is less likely than in other businesses. The average cost of worker’s compensation for a small business selling baked goods, for example, would be lower than a company whose workers are at higher risk for accidents or injuries, such as automotive or mechanical work.

Number of Employees

The fewer employees you have, the fewer individuals you need to cover. The average cost of worker’s compensation insurance for a small business with five employees will be drastically different from a company with 20 or 30 employees.


Every industry is different, and every sector has varying levels of risk. The average cost for worker’s compensation insurance for a small business largely depends on the industry in which you work. Again, the risk factors are significantly different from one company to another — even within the same industry.

Why Should You Get Worker’s Compensation Insurance?

There are several reasons why you should consider worker’s compensation insurance.

It’s the Law

While many states have different laws regarding coverage, worker’s compensation insurance, even for 1099 employees, is required. Some states allow employers to find worker’s compensation insurance through private insurance brokers, while others, such as Ohio, require a state-funded insurance company to handle worker’s compensation insurance.

These laws change and vary, so we recommend speaking to an insurance specialist and researching your state’s worker’s compensation laws. The average cost for worker’s compensation insurance for a small business also varies by state.

It Gets Your Employees the Help They Need

Worker’s compensation insurance can ensure your employees are taken care of. If an employee gets injured or sick, they need to recuperate. Worker’s compensation insurance ensures the employee will have funds to remain financially stable while getting the help they need to return to work.

It Keeps Your Employees Safe

Worker’s compensation insurance protects your company’s employees. If employees get sick or hurt, worker’s compensation insurance helps them remain financially stable and offers a safety net to ensure their well-being. This benefit builds employee trust and confidence in the company, leading to higher morale and productivity.

Finding Affordable Worker’s Compensation Insurance

Fusco Orsini & Associates provides comprehensive worker’s compensation insurance and can help you calculate your small business’s average cost of worker’s compensation insurance. Learn about the benefits of offering worker’s compensation insurance and receive a free quote today!

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