Why contractor workers comp is priced differently
Construction work involves falls, heavy equipment, power tools and lifting, so insurers assign construction class codes higher rates than office or retail work. Each trade has its own code, and a roofer is rated very differently from a drywall installer or an electrician.
Many states also apply stricter rules to construction. Some require coverage with just one employee where other industries get a higher threshold, and several limit the exemptions available to construction business owners.
Subcontractors and the year-end audit
If you hire subcontractors, the auditor will ask for a certificate of insurance showing each sub carried its own workers comp during the time they worked for you. Payments to uninsured subs are commonly added to your payroll and charged at your rates.
Keeping a folder of current certificates, and checking expiration dates before each job, is one of the simplest ways to avoid an unexpected audit bill.
Common contractor classes we see
- General contractors and construction managers
- Roofing
- Electrical and low-voltage
- Plumbing and HVAC
- Carpentry and framing
- Painting and drywall
- Masonry and concrete
- Landscaping and tree work
Contractors workers comp by state
Requirements and rating rules vary by state. Choose your state for the essentials, including who must carry coverage and who oversees it.
Frequently asked questions
Do I need workers comp if all my workers are subcontractors?
Possibly not for your own payroll, but you will likely still be audited for those payments. Without certificates proving each sub had its own coverage, insurers often treat those payments as your payroll. Some states and many general contractors also require you to carry a policy regardless.
Can I split payroll between trades?
Often yes. When records clearly show time spent in different types of work, payroll can sometimes be divided between class codes. The rules vary by state and rating bureau, so ask your agent how to document it.
What is a waiver of subrogation?
It is an endorsement that prevents your insurer from seeking reimbursement from a client after paying a claim. General contractors and property owners frequently require one in their contracts.