Workers comp for construction companies is typically more expensive than other industries due to higher injury risk, but costs vary widely depending on job type, payroll, and classification codes. The key to controlling costs is understanding how policies are priced and structured.
Construction consistently ranks among the highest-risk industries in the U.S. According to the Bureau of Labor Statistics (BLS), construction workers experience one of the highest rates of workplace injuries, particularly in roofing, framing, and heavy labor roles. This directly impacts how insurers calculate premiums and approve coverage.
—How Workers Comp Costs Are Calculated for Construction
Workers comp premiums are primarily based on payroll and risk classification. Insurers calculate cost per $100 of payroll using class codes.
Average Cost per $100 of Payroll
- General contractors: $5 – $15 per $100 payroll
- Roofing: $20 – $40+ per $100 payroll
- Framing: $15 – $30 per $100 payroll
- Electrical work: $3 – $10 per $100 payroll
Higher-risk trades like roofing or steel work carry significantly higher rates due to injury frequency and severity.
—Understanding Class Codes in Construction
Class codes are one of the most important factors in determining your workers comp cost. Each job type is assigned a classification that reflects risk level.
Examples of Construction Class Codes
- 5645: Carpentry
- 5551: Roofing
- 5403: Carpentry – interior
- 5183: Plumbing
Misclassification can dramatically increase your premium. For example, classifying a general laborer as roofing can double or triple your cost.
If you’re not familiar with how classifications work, review how workers comp class codes are defined and why they impact your costs.
—Workers Comp Requirements by State
Workers comp laws vary by state, but most states require construction companies to carry coverage as soon as they hire employees.
General Requirements
- Most states require coverage with 1 or more employees
- Construction is often strictly regulated
- Penalties apply for non-compliance
States like California, New York, and Florida enforce strict compliance rules, especially in construction.
—How Subcontractors and 1099 Workers Affect Your Policy
Many construction businesses use subcontractors, but this does not automatically remove your liability.
Key Rules for 1099 Subcontractors
- If a subcontractor does not carry their own workers comp, you may be held responsible
- Misclassification (1099 vs W-2) is a major compliance risk
- Insurers may include uninsured subcontractor payroll in your premium
This is one of the most common reasons construction companies face unexpected audit costs.
—How to Reduce Workers Comp Costs in Construction
- Use correct class codes
- Ensure subcontractors carry valid certificates of insurance
- Implement safety programs
- Consider pay-as-you-go policies
Beyond payment structure, there are additional strategies to reduce premiums. Explore these expert tips to lower workers comp costs in construction and improve your overall cost efficiency.
—Conclusion
Workers comp for construction companies is complex, but it becomes manageable when you understand how costs, classifications, and compliance rules work together.
The right policy is not just about meeting legal requirements — it’s about structuring coverage to match your workforce, reduce risk, and avoid unexpected costs.
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