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Incidents can happen in any business, no matter how careful they are. In the United States, over 500 work injuries occur per hour. If you own a business, it’s vital to have proper protection with workers’ compensation. But even with that security, many business owners are still wondering what is workers’ comp and how to make a workers’ comp claim. 

If your company is adequately insured, you can relax and avoid any expensive costs associated with workers’ comp. However, there are some expenses that the business must pay. For example, you’ll have monthly insurance premiums to cover, as well as the cost of the worker’s claim itself. And if you don’t know where to start, contract staffing agencies can help.

Workers’ Comp Insurance

The first step in ensuring protection from the costs of employee injuries is to have proper insurance. The majority of small businesses pay between $400-$800 per month for workers’ comp insurance premiums. But since different industries have varied risks, this number will fluctuate.


The highest premiums come with the construction and contracting industry. Next is landscaping, followed by cleaning services and food and beverage. The higher the chances an employee could suffer on the job, the higher the cost of insurance premiums. It makes sense that construction would have the highest premiums, as the risk of injury is high. 

Other factors that influence the cost of workers’ comp insurance premiums include location, annual payroll, type of work that your employees perform, and your claims history. Each state regulates workers’ compensation a little differently, which is why a premium in California could vary from one in Texas. 

Premiums vs. Claims

If your business is without insurance, then the average cost of a workers’ comp claim grows exponentially. It’s better to pay a premium between $400-$800 than a claim of $40,000, which is the average in the United States. Even if your state doesn’t require workers’ compensation insurance, you may consider purchasing it to avoid such extreme costs. 

Employer of Record Service Providers (EOR)

If you don’t know where to start, you’re not alone. Many recruiting and staffing firm leaders scratch their heads, simply wondering what is workers’ comp? To ease your burden, you can outsource all the work to Employers of Record like FoxHire. Some smaller recruiting and staffing firms don’t have a Human Resources or legal department to handle workers’ comp claims. Or, perhaps you want to focus on revenue generating tasks and don’t have the time to focus on them. EORs can help. 

Contract staffing isn’t just about finding temporary employees to fill staffing gaps, you are also asked to be employment experts in some cases. That may be a burden you are not prepared to take on. Workers comp, HR matters, on-boarding; all of it could take away your time to focus on what you do best, which is recruiting!

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