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Workers’ compensation insurance for small businesses typically costs between $70 and $200 per employee per month, depending on your industry, location, number of employees, and claims history. High-risk professions like construction or tree services may pay more, while lower-risk office-based businesses may pay significantly less. The premium is calculated using your state’s base rate per $100 of payroll, adjusted by your company’s risk classification and any modifiers like your experience rating or safety programs.

If you’re a sole proprietor with no employees, you are often not legally required to carry workers’ comp insurance. However, some states still recommend or allow sole proprietors to opt in voluntarily to protect themselves from injury-related costs. Additionally, if you work as a subcontractor, many general contractors or commercial clients may require proof of coverage, even if you’re a one-person business.

It depends on your state. In many states, if you classify someone as a 1099 contractor but they operate under your control, you may be legally required to cover them under your workers’ comp policy. Misclassifying 1099 workers to avoid providing coverage can lead to fines and audits. Some states evaluate contractors using “right-to-control” tests to determine whether workers are truly independent or actually employees.

Workers’ compensation costs vary widely by state due to local regulations, risk classifications, and benefit levels. For example, a construction business in California might pay $15–$30 per $100 in payroll, while the same business in a state like Texas or Indiana may pay less. The best way to determine your exact rate is to speak with a licensed insurance partner who understands your state’s specific requirements and rating structure.

In most cases, the hiring contractor or business owner may be responsible for ensuring subcontractors are covered by workers’ compensation—unless the subcontractor provides their own certificate of insurance. In many states, if a subcontractor is injured and lacks coverage, the hiring party can be held liable. Always verify and keep proof of workers’ comp insurance before allowing subcontractors to begin work.

Exemptions vary by state, but common exemptions include:

• Sole proprietors with no employees
• Partners in a partnership
• Members of an LLC (in some states)
• Corporate officers who file exclusion forms
• Certain agricultural or domestic workers

However, many business owners choose to carry voluntary coverage for exempt individuals to ensure they’re protected in case of injury. A licensed insurance partner can help you determine whether you qualify for an exemption in your state.

A sole proprietor is usually not required by law to carry workers’ comp unless they hire employees. However, many choose to purchase a policy voluntarily to:

• Cover themselves if they get hurt on the job
• Qualify for larger contracts that require proof of insurance
• Avoid gaps in coverage that could leave them financially exposed

Employers typically pay a rate per $100 of payroll based on their industry’s classification. For example:

• A low-risk clerical office might pay $0.50 to $1.00 per $100
• A roofer might pay $20 to $30 per $100

Other factors affecting cost include your state, number of employees, claims history, and experience modifier. Premiums can be reduced through safety programs, proper classification, and regular audits.

A workers’ comp claim can affect a small business in several ways:

• Premiums may increase after the next policy renewal
• Your experience modification rate (EMR) can go up, signaling higher risk
• You may need to implement corrective safety measures
• Missed work, overtime pay, or light-duty reassignment could affect productivity

That’s why proactive coverage, employee safety training, and quick claim reporting are critical to minimizing long-term impact.

General liability insurance for small businesses typically ranges from $300 to $1,200 per year, depending on:

• Business type and risk level
• Location and size
• Revenue
• Claims history

For higher-risk businesses (e.g., construction, cleaning), liability premiums may be bundled into a Business Owner Policy (BOP) for added savings and broader protection.

The best insurance for your business depends on your industry, size, and risk exposure, but the most common foundational policies include:

• Workers’ Compensation Insurance
• General Liability Insurance
• Commercial Auto Insurance
• Business Owner’s Policy (BOP)
• Professional Liability (E&O) for service-based businesses

For many, a combination of workers’ comp + general liability covers most risks while keeping premiums manageable.

A $1M general liability policy can cost anywhere from $400 to $1,500+ annually depending on:

• Business type (low-risk vs. high-risk)
• Number of employees
• Geographic location
• Claims history

Contractors, landscapers, and tradespeople often fall at the higher end of this range. Shopping through a licensed insurance partner ensures competitive pricing and policy terms that match your needs.