If you're a business owner in Virginia, understanding workers' compensation insurance costs is essential for budgeting and compliance. Whether you're launching a new venture or expanding your workforce, knowing what to expect can help you make informed decisions about protecting your employees and your business.
The Good News: Virginia Offers Competitive Rates
Virginia business owners have a significant advantage when it comes to workers' compensation costs. The state ranks as the 15th most affordable in the nation for workers' comp insurance, with rates approximately 21% below the national average. This competitive pricing makes Virginia an attractive state for businesses looking to manage their insurance expenses effectively.
As of 2025, the national average workers' compensation cost is around $1.03 per $100 of payroll. Virginia's rates typically fall well below this benchmark, giving local employers a cost advantage over many other states.
How Much Should You Expect to Pay?
The cost of workers' compensation insurance in Virginia varies significantly based on several key factors. Here's what influences your premium:
Industry Classification (Class Code)
Your industry is the single biggest factor affecting your workers' comp rates. Virginia uses the National Council on Compensation Insurance (NCCI) classification system, which assigns specific codes to different types of work based on risk levels.
Here are some real-world examples of Virginia workers' comp rates by industry (rates shown per $100 of payroll from 2024-2025 data):
- Office and Clerical Workers (Class Code 8810): $0.19 - $0.42 per $100 of payroll
- Retail Store Operations (Class Code 8017): $0.57 - $1.28 per $100 of payroll
- Restaurant Staff (Class Code 9082): $1.35 - $2.89 per $100 of payroll
- Landscaping Services (Class Code 0042): $3.63 - $5.47 per $100 of payroll
- Carpentry (Class Code 5645): $8.92 - $14.56 per $100 of payroll
- Roofing Contractors (Class Code 5551): $15.23 - $28.74 per $100 of payroll
As you can see, higher-risk industries like construction and roofing carry significantly higher rates than office-based businesses. This reflects the increased likelihood of workplace injuries in physically demanding occupations.
Real-World Cost Examples
To help you better understand what you might pay, let's look at some practical scenarios:
Example 1: Small Landscaping Company
A landscaping business with two employees and a combined annual payroll of $105,000 would calculate their premium as follows:
- Annual payroll: $105,000
- Rate for landscapers: $3.63 per $100
- Calculation: ($105,000 ÷ 100) × $3.63 = $3,812 annually
Example 2: Retail Store
A retail store with five employees and an annual payroll of $180,000:
- Annual payroll: $180,000
- Rate for retail operations: $0.95 per $100 (mid-range estimate)
- Calculation: ($180,000 ÷ 100) × $0.95 = $1,710 annually
Example 3: Office-Based Business
A technology consulting firm with clerical staff and an annual payroll of $250,000:
- Annual payroll: $250,000
- Rate for office workers: $0.30 per $100 (mid-range estimate)
- Calculation: ($250,000 ÷ 100) × $0.30 = $750 annually
For small businesses in Virginia, the average annual workers' compensation premium is approximately $641, or about $57 per month for basic coverage. However, this figure varies widely based on your specific industry and risk factors.
Factors That Affect Your Premium
Beyond your industry classification, several other factors influence what you'll pay:
Payroll Size: Your total employee wages directly impact your premium. Higher payroll means higher premiums, which is why the rate is calculated per $100 of payroll.
Claims History (Experience Modification Rate): Once your business has been in operation for a few years, your claims history comes into play. If you've had fewer claims than average for your industry, you may qualify for a discount. Conversely, a history of frequent or severe claims can increase your rates. This is expressed as an Experience Modification Rate (EMR), where 1.0 is average, below 1.0 earns you a discount, and above 1.0 increases your premium.
Number of Employees: More employees generally mean a higher statistical likelihood of claims, which can affect your rates.
Safety Programs: Implementing comprehensive safety training and workplace injury prevention programs can help you qualify for discounts with many insurance carriers.
Recent Rate Changes: Good News for Virginia Employers
Virginia employers received welcome news in late 2024 when the State Corporation Commission approved a 12% decrease in workers' compensation loss costs, effective April 1, 2025. This significant reduction reflects the overall health of Virginia's workers' compensation system, including declining claim frequency and stable medical costs.
This rate decrease means that many Virginia businesses will see lower premiums in 2025 compared to previous years, making it an excellent time to review your coverage and ensure you're getting the best rates available.
Who Needs Workers' Comp Insurance in Virginia?
Virginia law requires all businesses with two or more employees (full-time or part-time) to carry workers' compensation insurance. However, even businesses with fewer than two employees can be held liable for workplace injuries if they don't have coverage, making it a smart investment regardless of business size.
Important exceptions include:
- Sole proprietors and partners are automatically excluded but can elect coverage
- Corporate officers are automatically included but can partially exclude themselves by filing a Notice of Rejection form
- LLC members are not automatically covered but can elect coverage
Failing to carry required workers' compensation insurance in Virginia carries serious penalties, including daily fines up to $250 (with a maximum of $50,000), criminal misdemeanor charges with potential jail time, and stop-work orders that can shut down your business.
How to Lower Your Workers' Comp Costs
Smart business owners can take several steps to minimize their workers' compensation premiums:
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Implement Strong Safety Programs: Reducing workplace injuries through comprehensive training and safety protocols can significantly lower your long-term costs.
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Accurate Classification: Ensure your employees are properly classified according to their actual job duties. Misclassification can lead to overpayment or compliance issues.
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Return-to-Work Programs: Establishing programs that help injured employees return to modified duties quickly can reduce claim costs and demonstrate risk management to insurers.
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Shop Around: Insurance carriers vary significantly in their pricing and appetites for different industries. Comparing quotes from multiple providers is essential.
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Work with an Experienced Agent: Navigating Virginia's workers' compensation system and finding the best coverage requires expertise in classification codes, carrier markets, and discount opportunities.
Why TransAtlantic Commercial Insurance Has the Expertise You Need
At TransAtlantic Commercial Insurance (TCIIns.net), we specialize in finding appropriate workers' compensation coverage across a diverse range of industries and business sectors. Our expertise stems from years of experience working with Virginia employers and understanding the unique challenges each industry faces.
Industry-Specific Knowledge: Whether you operate in construction, hospitality, retail, professional services, or any other sector, we understand the specific risk profiles and classification codes that apply to your business. We don't offer one-size-fits-all solutions—we take the time to understand your operations and find coverage that truly fits your needs.
Access to Multiple Carriers: As an independent agency, we work with numerous top-rated insurance carriers, each with different appetites for various industries and risk profiles. This means we can shop your coverage across the marketplace to find you the most competitive rates available, rather than being limited to a single carrier's offerings.
Expertise in Complex Classifications: Many businesses have employees performing different types of work, each requiring its own classification code and rate. We ensure your payroll is properly allocated across the correct codes, preventing overpayment while maintaining full compliance.
Understanding of Risk Management: We help you implement strategies that can lower your long-term workers' compensation costs, including safety program development, return-to-work protocols, and claims management best practices.
Virginia Market Knowledge: We stay current on Virginia-specific regulations, rate changes, and carrier market conditions. When the State Corporation Commission approved the recent 12% rate decrease, we immediately began working to ensure our clients benefited from the lower rates.
Support for High-Risk Industries: Even if you operate in a high-risk industry that other agencies struggle to insure, we have access to specialized markets and programs designed specifically for challenging classifications.
Ongoing Service: Workers' compensation isn't a "set it and forget it" coverage. As your business grows and changes, we're here to adjust your coverage, handle audits, and ensure you're always properly protected without overpaying.
Take the Next Step
Understanding what workers' compensation insurance costs in Virginia is just the first step. The next step is getting a personalized quote based on your specific business, industry, and workforce.
At TransAtlantic Commercial Insurance, we make the process simple and straightforward. We'll help you:
- Determine the correct classification codes for your business
- Calculate an accurate estimate based on your actual payroll
- Compare quotes from multiple carriers
- Identify potential discounts and cost-saving opportunities
- Ensure full compliance with Virginia regulations
Don't leave your workers' compensation coverage to chance, and don't overpay for protection you need. Contact TransAtlantic Commercial Insurance today @ 703-674-0299 to discover how much you could save while ensuring your business and employees are properly protected.
Whether you're a new business owner purchasing your first policy or an established company looking to reduce costs, we have the expertise and carrier relationships to deliver the coverage you need at prices that make sense for your budget.
Note: The rates and examples provided in this article are for illustrative purposes based on 2024-2025 market data. Actual rates vary by insurance carrier, specific business characteristics, and individual risk factors. Contact TransAtlantic Commercial Insurance for a personalized quote based on your unique circumstances.