The short answer
Workers’ compensation requirements and benefits depend on the employee’s work location and applicable law. Employer’s liability addresses specified related exposures, subject to policy terms. Pricing depends on payroll, duties, classifications, experience and carrier rules. The calculation below is hypothetical, not a verified rate or a promise of binding within a fixed number of days.
Use this guide to prepare questions, not to establish coverage. Any unsourced costs, limits or timing ranges are illustrative planning examples, not quotes, verified market averages or carrier commitments.
The two parts of a workers’ comp policy
| Part | What it covers |
|---|---|
| Part One: workers’ compensation | Medical bills, lost wages and rehabilitation required by state law |
| Part Two: employer’s liability | Lawsuits related to workplace injuries, usually $1M / $1M / $1M on startup policies |
| Part Three: other states | Benefits in states not listed, subject to limits |
How workers’ comp premium is calculated
An illustrative starting calculation is payroll divided by 100, multiplied by the applicable rate for each classification. Experience modifiers and other rating rules may apply. The correct classifications depend on duties and state rules; do not assume every software employee belongs in the same office class.
For illustration only, $1,000,000 of payroll at a hypothetical $0.20 per $100 is $2,000 before modifiers, minimums, fees and state charges. This is not a verified rate for class 8810 or any state. A premium audit may compare estimated and actual exposures and adjust the premium under the policy’s terms.
Remote and multi-state employees
Coverage follows where each employee works. List every state with an employee on the policy before their first day; see workers’ comp for remote employees in other states. Converting contractors adds payroll; see converting contractors to employees. Terms are defined in the startup insurance glossary.
Who can bind startup workers’ comp
Tell the broker about each employee’s duties and work location before the start date or a move. StartupInsurance.ai can help check the coverage options and required updates. Wait for confirmation of coverage; neither an application nor a requested start date guarantees it is in place.
Get a contract check
Send us payroll by state. We provide an initial written review within one business day after receiving the necessary information, with questions and next steps. Carrier quotes, coverage decisions and policy changes may take longer. Get a free contract check.
A few more answers
Frequently asked questions
What is workers' comp class code 8810?
It is associated with clerical office duties in applicable classification systems. Eligibility and alternatives depend on duties and state rules; do not assign it to every software or remote worker without checking the carrier’s classification requirements.
What is an experience modification?
It's a factor that raises or lowers your rate based on your past claims compared with similar employers. Most startups are too small to have one at first and pay the standard rate.
Do part-time employees need workers' comp?
Generally, yes. Part-time employees are employees under workers' comp laws, and they count toward any state threshold. Their payroll is included in the premium like everyone else's.
What is employer's liability coverage?
It's Part Two of the policy. It covers lawsuits connected to a workplace injury that fall outside workers' comp benefits, such as claims by an injured employee's family.
Can startups pay workers' comp based on actual payroll each month?
Often, yes. Pay-as-you-go plans link to your payroll provider and bill from actual payroll each run, which reduces audit surprises.
General information, not a coverage determination or legal advice. Unless a specific source is identified, prices and timing ranges are illustrative planning examples—not measured market averages, quotes or guarantees. Policy wording, carrier, state and your company’s operations determine what applies.