Workers’ compensation insurance is more than just a suggestion for contractors; it’s a legal requirement in almost every state. This coverage helps protect your employees and your business by paying for medical bills, lost wages, and rehabilitation if someone gets hurt on the job.
At ContractorNerd, we offer a modern solution for contractors to get workers’ compensation coverage. Our platform gives you quotes in just minutes, and our brokers help you complete your coverage within 24 hours. You can skip the extra forms and long waits that usually come with traditional insurance agents.
ContractorNerd stands out by combining digital speed with expert advice. Our platform makes buying insurance simple, and our licensed brokers are always available by chat or phone to help you get the right coverage for your business. They review your trade and projects to recommend the right limits and endorsements, explain common claim situations so you know what’s covered, and offer tips to manage your premiums through smart deductible and carrier choices. You get all this without losing important protection.
In this comprehensive guide, you’ll discover:
- How premiums are calculated, including key factors (payroll, ExMod, and class codes)
- State-by-state rate comparisons showing why location matters for your premium costs
- Four proven strategies to significantly reduce your insurance costs, including common misses around subcontractor documentation
- Essential class codes by trade with detailed descriptions to ensure you’re properly classified
- ContractorNerd’s instant quote process that gets you from application to coverage in less than 24 hours
When you’re ready to purchase coverage, ContractorNerd’s digital platform makes getting protected faster and easier than ever before.
Need coverage for a specific trade? We’ve developed detailed guides for:
- Carpenters Workers’ Compensation (Workers’ Compensation for Carpenters)
- Electrician Workers’ Compensation (Workers’ Compensation for Electricians)
- Handyman Workers’ Compensation (Workers’ Compensation for Handymen)
- HVAC Workers’ Compensation (Workers’ Compensation for HVAC)
- Landscaping Workers’ Compensation (Workers’ Compensation for Landscaping)
- Painter Workers’ Compensation (Workers’ Compensation for Painters)
- Plumbers Workers’ Compensation (Workers’ Compensation for Plumbers)
Read on for a detailed overview of how workers’ compensation insurance works and why general contractors and artisan contractors need appropriate protection.
What is Workers’ Compensation Insurance?
Workers’ compensation insurance provides medical care, rehabilitation, and wage replacement to employees injured on the job. For contractors, this coverage is essential protection against the high costs of workplace injuries.
Common contractor injuries include:
- Back strains and musculoskeletal injuries from heavy lifting
- Cuts and amputations from power tools
- Respiratory problems from dust and chemical exposure
- Eye injuries from flying debris
- Falls from ladders, scaffolding, or structures
- Electrical shocks from exposed wiring
- Hearing damage from loud machinery
Construction injury costs can easily reach tens or hundreds of thousands of dollars. Workers’ compensation protects your business from financial disaster while ensuring injured employees receive proper care.
Key features of workers’ comp laws:
- No-fault coverage – Benefits paid regardless of who caused the injury
- Exclusive remedy – Prevents employees from suing you directly
- Mandatory coverage – Required in nearly every state
- Employer-financed – You pay all premiums; employees contribute nothing
Failing to carry required workers’ compensation insurance exposes your business to significant fines and unlimited liability.
Why Do Contractors Need Workers’ Comp Insurance?
Construction work is among the most dangerous occupations. Despite safety precautions, injuries happen regularly due to the physical demands and hazardous conditions inherent to job sites.
Legal requirements vary by state:
- 48 states require workers’ comp for most contractors
- Texas makes it optional, but 90% of contractors still buy coverage to avoid lawsuits
- Oklahoma requires coverage for businesses with 3+ employees
- Monopolistic states (North Dakota, Ohio, Washington, Wyoming) require coverage through state-run programs
Even where not legally required, workers’ compensation is highly recommended. Without it, injured employees can sue you directly for unlimited damages—a risk that could bankrupt your business.
What Does Workers’ Comp Insurance Cover for Contractors?
Workers’ compensation provides two primary benefits when employees are injured:
Core Coverage
Medical expenses – Unlimited coverage for all injury-related medical costs including hospital bills, surgery, physical therapy, medications, and medical equipment.
Wage replacement – Typically covers about two-thirds of the employee’s average wages while they recover, subject to state-imposed maximums.
Additional Benefits
- Death benefits for surviving family members
- Vocational rehabilitation for employees who can’t return to their previous work
- Mileage reimbursement for medical appointments
Important Exclusions
Workers’ comp only covers injuries “arising out of and in the course of employment.” Key exclusions include:
- Injuries outside work hours or off company property
- Pre-existing conditions (unless work significantly worsens them)
- Self-inflicted injuries or those caused by intoxication
- Injuries from criminal activity or policy violations
- Common illnesses unrelated to work duties
Understanding these coverage limits helps ensure you have appropriate supplemental insurance to fill any gaps.
How Much Does Workers’ Comp Cost for Contractors?
Workers’ compensation costs vary significantly by state and the risk level of your work. Three main factors determine your premium:
1. Payroll – The Primary Cost Driver
Your premium is calculated as a rate per $100 of annual payroll. For example:
- High-risk work (Code 5645): $5 – $15+ per $100 of payroll
- Office work (Code 8810): Typically less than $0.25 per $100 of payroll
Key payroll considerations:
- Based on total annual employee compensation
- Separate rates apply to different types of work
- Subcontractor payments can often be excluded (with proof of insurance via COIs)
- Add a 10-20% buffer to prevent audit surprises
2. ExMod (Experience Modification Rate) – Your Claims History Impact
Your ExMod compares your past workers’ comp claims to industry averages for similar contractors. This modifier ranges from 0.75 to 1.25, with 1.00 as the baseline:
- ExMod below 1.00 = Fewer/cheaper claims than average = Premium discount
- ExMod above 1.00 = More/costlier claims than average = Premium penalty
Real impact on costs:
- ExMod of 0.90 reduces a $100,000 premium to $90,000 (10% savings)
- ExMod of 1.15 increases a $100,000 premium to $115,000 (15% penalty)
An ExMod above 1.15 can seriously hurt your competitiveness when bidding jobs. Focus on safety programs and claims management to drive your ExMod below 1.00 for ongoing savings.
3. Class Codes – Risk-Based Rate Categories
Class codes determine your base rate per $100 of payroll based on injury risk. The system varies by state:
- 37 states use NCCI (National Council on Compensation Insurance) codes
- 9 states have independent bureaus with similar but different codes (e.g., WCIRB in California)
- 4 monopolistic states (North Dakota, Ohio, Washington, Wyoming) use state-run programs with their own codes
Common general contractor codes (NCCI):
- 5645 – For contractors building 1-2 family homes up to 3 stories. Includes framing, decking, siding, trim work, cabinet/window/door installation. Common for residential builders & remodeling contractors working on single-family homes.
- 5403 – For contractors working on commercial projects or residential buildings over 3 stories. Includes all carpentry work on office buildings, retail spaces, apartments, mixed-use buildings. Used by commercial contractors & large-scale builders.
Artisan contractor codes vary by trade:
Choosing the correct code is crucial – improper classification can dramatically increase your premiums and cause surprises at your year-end audit. Artisan Contractors are generally classified under different codes depending on the type of construction work:
| NCCI Code | Simple Description | Longer Description |
| 8810 | Clerical – Office Employees | For office workers performing clerical duties like data entry, filing, answering phones, bookkeeping. Common for administrative staff, receptionists, office managers in construction companies. Excludes employees who visit job sites or perform manual work. |
| 0042 | Landscape Gardening | For landscaping contractors doing lawn care, planting flowers, shrubs & trees. Includes garden design & installation. Common for lawn care services, landscapers & gardening contractors. Excludes excavation/grading work. |
| 0917 | Residential Cleaning Services | For house cleaning services working inside homes. Includes regular cleaning, deep cleaning, move-in/out cleaning. Common for maid services, residential cleaning companies serving homeowners. |
| 2585 | Carpet/Upholstery Cleaning | For carpet cleaning services working in homes and businesses. Includes rug and upholstery cleaning in shop or on-site. Common for carpet cleaning companies, restoration services doing water damage cleanup. |
| 2802 | Carpentry – Shop Only | For woodworking shops manufacturing doors, windows, trusses, stairs, millwork. No installation work included. Common for millwork shops, truss manufacturers, and cabinet makers working only in their shop. |
| 3179 | Electrical Equipment Manufacturing | For manufacturers making electrical fixtures, appliances, equipment. Shop work only, no installation. Common for companies manufacturing light fixtures, electrical components, small appliances in factory settings. |
| 3724 | Door Installation – Overhead | For contractors installing overhead/garage doors, commercial equipment & machinery. Includes electric door operators, scales, refrigeration equipment. Common for garage door companies & equipment installation contractors. |
| 5022 | Masonry Construction | For masonry contractors building with brick, block, stone. Includes fireplaces, stucco, exterior plastering. Common for brick masons, block layers, stone contractors on commercial and residential projects. |
| 5037 | Painting – High Structures | For painters working on metal structures over 2 stories, bridges, water towers. Specialized high-risk painting. Common for industrial painting contractors, bridge painters, tower painting specialists. |
| 5040 | Steel Erection – Structural | For ironworkers erecting structural steel frames, metal buildings, towers, bridges. Heavy steel construction work. Common for steel erection contractors on commercial buildings, industrial structures. |
| 5102 | Door & Window Installation | For contractors installing residential/commercial doors & windows. Includes aluminum, vinyl, wood, fiberglass, storm shutters & shower doors. Common for window replacement companies & door installation specialists. |
| 5146 | Furniture Installation – Portable | For contractors installing office furniture, cubicles, modular workstations & metal partitions. Common for office furniture dealers, commercial furniture installers & companies setting up corporate workspaces. |
| 5183 | Plumbing & Sprinkler Installation | For plumbers and contractors installing plumbing, underground lawn sprinklers. Includes domestic water heaters. Common for plumbing contractors, irrigation system installers, residential service plumbers. |
| 5190 | Electrical Wiring – Buildings | For electricians doing interior wiring, fixture installation, electrical repairs in buildings. Common for electrical contractors doing residential and commercial wiring, panel upgrades, fixture installation. |
| 5191 | Office Machine Service | For technicians servicing computers, printers, copiers, office equipment. Includes installation and repair work. Common for IT service companies, computer repair shops, office equipment dealers doing service calls. |
| 5213 | Concrete Construction | For concrete contractors doing foundations, walls, commercial buildings. Includes forming, pouring, finishing. Common for commercial concrete contractors, foundation specialists, and concrete building contractors. |
| 5215 | Concrete – Residential | For concrete work on 1-2 family homes including foundations, driveways, patios. Not for monolithic concrete homes. Common for residential concrete contractors doing basement walls, garage slabs, driveways. |
| 5221 | Concrete – Flatwork | For contractors pouring concrete floors, driveways, sidewalks, patios. Includes decorative concrete and pavers. Common for flatwork specialists, driveway contractors, decorative concrete installers. |
| 5348 | Tile & Stone Installation | For contractors installing ceramic tile, marble, granite, stone floors and countertops. Interior finish work. Common for tile setters, bathroom remodelers, kitchen contractors doing tile and stone work. |
| 5403 | Carpentry – Commercial & Large Buildings | For carpenters on commercial projects or residential buildings over 3 stories. Includes all carpentry work on office buildings, retail spaces, apartments, mixed-use buildings. Used by commercial contractors & large-scale builders. |
| 5437 | Carpentry – Cabinet/Trim Installation | For contractors installing cabinets, interior trim, countertops (except stone), hardwood floors. Common for cabinet installers, finish carpenters, and kitchen remodeling specialists doing interior millwork |
| 5445 | Wallboard Installation | For drywall contractors installing sheetrock, taping, finishing in buildings. Includes metal stud framing. Common for drywall companies, commercial interior contractors doing walls and ceilings. |
| 5474 | Painting – All Types | For painting contractors working on buildings, metal tanks, fire escapes & interiors. Includes brush/spray application & waterproofing. Common for commercial & residential painters, excluding bridges or structures over 2 stories. |
| 5478 | Floor Covering Installation | For contractors installing carpet, vinyl, laminate flooring. Does not include hardwood or tile. Common for flooring stores, carpet installers, and contractors specializing in resilient flooring installation. |
| 5479 | Insulation Work | For contractors installing thermal and acoustic insulation in walls, attics, buildings. Includes blown-in and batt insulation. Common for insulation contractors doing residential and commercial energy efficiency work. |
| 5480 | Plastering – Interior | For plasterers doing interior plastering, drywall finishing, acoustic ceilings. Includes interior waterproofing. Common for plastering contractors, drywall finishers working on commercial and residential interiors. |
| 5506 | Street/Road Construction – Paving | For contractors paving roads, parking lots, driveways & airport runways. Includes asphalt/concrete work, resurfacing & seal coating. Common for paving companies & road construction contractors. Excludes excavation/grading. |
| 5535 | Sheet Metal Installation | For contractors installing metal ceilings, wall coverings, metal awnings, sheet metal work. Common for HVAC duct installers, metal siding contractors, architectural metal installers on commercial buildings. |
| 5537 | HVAC Installation & Service | For HVAC contractors installing and servicing heating, ventilation, air conditioning, refrigeration systems. Common for HVAC companies doing commercial and residential system installation, service, and repairs. |
| 5551 | Roofing – All Types | For roofing contractors installing shingles, metal, flat roofs, repairs. All roofing materials and methods. Common for roofing companies doing residential and commercial new roofs, re-roofs, and repairs. |
| 5606 | Contractor – Project Management Only | For construction executives, project managers & superintendents who manage projects but don’t perform hands-on work. Must supervise through foremen only. Common for owners & senior managers overseeing multiple job sites. |
| 5610 | Construction Site Cleanup | For cleanup crews removing construction debris after project completion. Does not include detailed cleaning for occupancy. Common for construction cleanup contractors and debris removal services at job sites. |
| 5645 | Carpentry – Residential Construction | For carpenters building 1-2 family homes up to 3 stories. Includes framing, decking, siding, trim work, cabinet/window/door installation. Common for residential builders & remodeling contractors working on single-family homes. |
| 5651 | Carpentry – Multi-Family Dwellings | For carpenters building apartments, condos, townhomes up to 3 stories. Includes all carpentry work like framing, siding, trim, cabinets. Common for multi-family residential builders and apartment construction contractors. |
| 6217 | Excavation & Grading | For excavation contractors doing digging, grading, backfilling for construction projects. Common for excavation companies, site work contractors preparing building sites, utility trenching contractors. |
| 6229 | Septic Tank – Installation & Service | For contractors installing septic tanks, drainage systems, and irrigation systems. Includes excavation, tank placement, drain field installation, and system connections. Common for septic installers, drainage contractors, and irrigation system builders. |
| 6306 | Sewer Construction – All Operations | For contractors building sewer mains, storm sewers, and underground sewer systems. Includes excavation, pipe laying, manholes, and connections. Common for municipal sewer contractors and utility construction companies working on public infrastructure. |
| 6319 | Water/Gas Main Construction | For utility contractors installing water mains, gas lines, connections. Includes trenching and pipe laying. Common for underground utility contractors, municipal contractors doing water and gas line work. |
| 6325 | Conduit Construction | For contractors installing underground conduit for electrical cables and wires. Includes trenching and conduit placement. Common for electrical contractors doing underground utility work and cable installation. |
| 6400 | Fence Installation | For contractors installing wood, vinyl, metal, chain link fences. Hand installation only, no heavy equipment. Common for fence companies doing residential and commercial fence installation and repairs. |
| 7605 | Alarm System Installation | For contractors installing burglar alarms, fire alarms, security cameras and systems. Common for security companies, alarm installers, and low voltage contractors doing residential and commercial security work. |
| 8227 | Construction Yard Operations | For permanent construction yards reconditioning forms, storing equipment. Includes concrete form rental operations. Common for construction companies’ equipment yards and concrete form rental businesses. |
| 9014 | Janitorial Services | For commercial cleaning contractors doing office cleaning, floor care, restroom maintenance. No above-ground window cleaning. Common for janitorial companies, office cleaning services, building maintenance contractors. |
| 9102 | Lawn Maintenance Services | For lawn care companies doing mowing, trimming, weed control, lawn treatments. Ground-level tree work only. Common for landscaping companies providing regular lawn maintenance to residential and commercial properties. |
| 9170 | Window Cleaning – Above Ground | For window cleaning contractors working above ground level using ladders, scaffolds, or lifts. High-rise window cleaning. Common for commercial window cleaning companies servicing office buildings and high-rises. |
| 9402 | Sewer Cleaning – Service & Maintenance | For companies cleaning and maintaining sewer lines, storm drains, and catch basins. Includes jetting, rodding, video inspection, and debris removal. Common for drain cleaning services, municipal sewer contractors, and septic pumping companies. |
| 9519 | Appliance Service & Repair | For technicians servicing household and commercial appliances including installation and repair. Common for appliance repair companies, HVAC service techs working on refrigerators, washers, dryers, dishwashers. |
| 9521 | Display & Sign Installation | For contractors installing advertising displays, signs, window displays from floor level. Includes away-from-shop upholstering. Common for sign companies, display installers, visual merchandising contractors. |
The Work Comp Premium Formula
Workers’ comp premiums follow this simple formula:
Premium = (Payroll ÷ 100) × Base Rate × ExMod
Where:
- Payroll = Total annual employee compensation
- Base Rate = Your class code’s rate per $100 of payroll
- ExMod = Your experience modifier based on claims history
You can control costs by managing payroll classification, ensuring proper class codes, and maintaining a strong safety record to keep your ExMod low.
Workers’ compensation insurance costs vary greatly by state since each state governs the specifics of coverage required within its borders. Rates are also driven by the classification or risk-level of the contractor’s employees.
Contractor Workers’ Compensation Premium Calculator
To estimate your potential workers’ compensation premium costs based on your contracting business’ unique parameters, use our interactive Contractor Premium Calculator:
General Contractors Workers’ Compensation Premium Estimator
This tool provides an estimate of your annual workers’ comp premium for general contractors based on your state, payroll, and business profile.
By inputting key variables like your estimated annual payroll, employee class codes, your current or projected EMR, and growth estimates, the calculator will generate an indicative premium range you can expect based on typical rating formulas and industry benchmarks.
This allows contractors to model different payroll, EMR, and classification scenarios to understand how policy variables and risk management impact potential premium costs. Comparing the calculator’s rate estimates against actual quotes from insurance carriers can help you negotiate the optimal workers’ comp policy rate for your business.
Keep in mind projections are estimates only, and you should validate all policy details with insurance providers before purchasing coverage. But using the Contractor Premium Calculator gives you a powerful starting point to forecast and control workers’ comp costs based on your firm’s risk profile.
Comparing Workers’ Comp Rates for Contractors by State
In addition to individual risk characteristics, the state in which a contractor operates can have a major impact on workers’ compensation premium expenses. Each state regulates its own workers’ comp system with unique laws, base rates, benefit mandates, and cost drivers.
Some states have significantly higher workers’ comp premium factors across all occupations, resulting in material cost differences even among similar contractor firms. For multi-state operators, understanding and accounting for jurisdictional variables is crucial in insurance planning and cost control efforts.
Below we’ve compiled typical rates for residential contractors using NCCI Work Comp Code 5645 (or state equivalent) which is typically used by contractors building 1-2 family homes up to 3 stories
Typical Rate per $100 payroll for Residential Contractors (5645)
| State | Rate per $100 payroll |
| Alabama | $14.07 |
| Alaska | $9.78 |
| Arizona | $10.17 |
| Arkansas | $6.33 |
| California | $8.46 |
| Colorado | $7.40 |
| Connecticut | $17.17 |
| Delaware | $9.06 |
| Florida | $12.61 |
| Georgia | $43.42 |
| Hawaii | $10.60 |
| Idaho | $12.93 |
| Illinois | $19.23 |
| Indiana | $5.56 |
| Iowa | $9.65 |
| Kansas | $10.53 |
| Kentucky | $9.81 |
| Louisiana | $17.76 |
| Maine | $10.58 |
| Maryland | $7.23 |
| Massachusetts | $6.93 |
| Michigan | $10.27 |
| Minnesota | $11.44 |
| Mississippi | $9.19 |
| Missouri | $12.48 |
| Montana | $9.85 |
| Nebraska | $9.15 |
| Nevada | $7.89 |
| New Hampshire | $9.54 |
| New Jersey | $17.09 |
| New Mexico | $12.78 |
| New York | $11.47 |
| North Carolina | $16.73 |
| North Dakota | $3.51 |
| Ohio | $4.59 |
| Oklahoma | $13.80 |
| Oregon | $6.70 |
| Pennsylvania | $9.50 |
| Rhode Island | $9.03 |
| South Carolina | $21.48 |
| South Dakota | $10.29 |
| Tennessee | $12.84 |
| Texas | $4.39 |
| Utah | $9.90 |
| Vermont | $11.50 |
| Virginia | $9.73 |
| Washington | $8.20 |
| West Virginia | $5.72 |
| Wisconsin | $13.07 |
| Wyoming | $4.31 |
This data reveals material cost differences between states. Premium factors in high cost states like New Jersey run nearly 3X higher than lower cost states like Indiana for similar contractors.
Understanding jurisdictional risk and regulatory variables allows contractors to incorporate geographic cost differences into their insurance planning and budgeting process. Operating across state lines requires particular attention to localized factors that impact premiums.
Now that we’ve reviewed key elements that influence workers’ comp costs for contractors, let’s examine proactive strategies contractors can employ to reduce rates and secure affordable coverage.
Four Expert Strategies to Lower Contractor Workers’ Comp Premiums
Agents typically recommend these three core tactics to control your workers’ comp costs:
- Enforce safety first. A formal program with regular training and inspections is your best long-term savings.
- Shop and negotiate. Compare multiple carrier quotes at renewal—your agent should use competition to drive down rates.
- Lean on specialists. An advisor experienced in contractor coverage spots hidden fees, handles audits, and ensures you’re not overcharged.
That said, smart contractors can benefit from the following strategies to proactively manage their work comp premiums.
1. Avoid One-Off High-Risk Class Code Projects
Insurance underwriters classify you by your primary specialty—and they’ll double-check both your project mix and your online presence. Taking on “riskier” or unrelated work can bump you into a high-risk “handyman/remodeler” code (e.g. $5 → $12 per $100 payroll), and advertising those services online only strengthens their case.
- Prevent misclassification. Consistent trade focus—both on-site and online—slashes premiums, simplifies audits, and keeps your EMR and costs on track.
- Stay in your lane. Focus on your core trade and refer out non-specialty jobs. If you must handle them, split your payroll by project so only those hours incur the higher rate.
- Audit your digital footprint. Underwriters routinely review your website, social channels, and directory listings. Remove any mention of non-core services—or clearly state you subcontract that work—so you’re not flagged for unintended exposure.
- Consider referral revenue. Instead of doing the work yourself, earn a fee by connecting clients to trusted specialists. Your bottom line grows without raising your comp rate.
2. Only Hire Insured Subcontractors – and Track Their COIs – or Pay the Price
Always require every subcontractor to provide a current Certificate of Insurance (COI) proving active workers’ comp coverage—because if their policy lapses (or they never had one), any injury on your job becomes your claim and your cost.
- Make COIs non-negotiable. Include proof of comp coverage as a hard bid requirement. Don’t assume—it’s your liability if their coverage fails.
- Centralize and audit. Keep a simple database or spreadsheet listing each sub, their coverage limits, COI expiration date, and renewal reminders. Review monthly—and place work on hold immediately if a COI is missing or expired.
- Handle uninsured subs. If you hire someone without comp insurance, you must add them to your own policy. Factor that extra premium into your bid and discuss the cost impact with your carrier up front to avoid surprises.
- Prioritize insured partners. While subs without coverage may quote cheaper rates, the long-term savings of smooth audits, fewer claims, and stronger carrier relationships make insured subs worth the small extra premium.
By insisting on insured subs—and rigorously tracking every COI—you shield your business from unexpected comp claims, costly audit adjustments, and premium spikes.
3. Proactively Manage Your ExMod to Lower Premiums Over Time
Your Experience Modification Rate (ExMod) measures your claims history versus industry peers—and directly adjusts your workers’ comp premium up or down.
- Grace period for new businesses. Most states “freeze” ExMods at 1.00 for the first 1–2 policy years, regardless of claims. This gives you a window to build safe practices without penalty.
- Annual credits and debits. After the grace period, your ExMod recalculates each renewal:
- Credit (ExMod < 1.00) if your claims are better than average, reducing your premium.
- Debit (ExMod > 1.00) if your losses exceed the norm, increasing your cost.
- Action plan:
- Implement a formal safety program with regular training, toolbox talks, and hazard inspections.
- Conduct quarterly risk assessments and analyze claim trends to pinpoint trouble spots.
- Fast-track return-to-work with light-duty options to shorten indemnity payments.
- Monitor your ExMod each renewal—set a goal to shave 0.05 off your modifier annually.
By aggressively preventing injuries and managing every claim, you’ll turn that first-year grace into ongoing premium savings—and watch your comp costs drop year after year.
4. Track Payroll by Work Performed to Avoid Costly Audits
Keeping precise payroll records—broken out by each type of work—is your best defense against surprise audit bills and misclassification. Here’s how to make it work:
- Separate jobs by classification
Create distinct payroll pools for each trade or task (e.g., cabinetry vs. countertop installation). At audit time, only the hours tied to the higher-risk work draw the corresponding rate—rather than having your entire payroll reclassified. - Quarterly projections and reviews
Every quarter, compare your estimated payroll by class code against actual wages paid. If one pool is running hot, either adjust your next projections or set aside contingency funds. This avoids a lump-sum audit adjustment at year’s end. - Use digital tools
Leverage payroll or project-management software to tag hours by job and automatically generate classification-specific reports. This reduces manual errors and gives you instant visibility into your exposure. - Prevent overcharges
Accurate payroll splitting ensures you only pay the premium you owe—no more. Detailed records also make audits run smoothly and give you clear evidence if any classification disputes arise.
By rigorously tracking payroll by work performed, you stay compliant, eliminate audit surprises, and keep your workers’ comp costs tightly aligned with your actual risk.
Get Instant Workers’ Comp Quotes – Full Coverage in 24 Hours with ContractorNerd
Traditional workers’ compensation applications can take weeks of back-and-forth with agents, involve endless paperwork, and result in frustrating delays. ContractorNerd has revolutionized this process for contractors with our fully digital application that delivers instant preliminary quotes and tailored final quotes in just 24 hours.
How ContractorNerd’s Modern Process Works
Step 1: Instant Digital Quote (5 Minutes) Our online application collects 90% of the necessary information upfront through smart forms designed specifically for contractors. You’ll provide:
- Basic business information and trade classifications
- Estimated annual payroll by worker type
- Years in business and safety protocols
- Previous claims history (if any)
Within minutes of submitting your information, you’ll get an instant preliminary quote based on your answers. You won’t have to wait for callbacks or email replies.
Step 2: Expert Verification & Broker Support (24-48 Hours) While other providers make you wait weeks, our specialized team immediately begins verifying the critical factors that determine your final rate:
- Classification Confirmation: We ensure you’re classified correctly for your actual work, preventing costly audit surprises
- Experience Modifier (xMod) Verification: We pull your official xMod to apply any earned discounts from your safety record
- Insurance History Review: We verify prior coverage to ensure continuous protection and identify potential savings
During the process, our licensed brokers are ready to give you personalized help. They look at your trade requirements, explain coverage situations that matter to your work, and help you improve your policy with smart deductible and carrier choices. With instant digital quotes and expert advice, you get both convenience and confidence when choosing your coverage.
Step 3: Tailored Final Quotes Within 24-48 hours, you’ll receive customized quotes from multiple A-rated carriers, complete with:
- Side-by-side premium comparisons
- Bundling options with commercial auto, general liability, and other policies
- Payment plan options to manage cash flow
Start Your Application Today
Outdated insurance processes can slow down your business. With ContractorNerd, you can:
- Complete your application in minutes from any device
- Get an instant preliminary quote to budget your costs
- Access expert broker support via chat or phone whenever you need it
- Receive final, bindable quotes within 48 hours
- Start coverage immediately upon approval
If you want a modern way to buy workers’ comp, you can get an instant quote and join thousands of contractors who have made their insurance easier with ContractorNerd’s digital approach and expert broker support.