Insurance Curator Last updated: February 2 , 2026 – data, rates and statutes current to this date.
Table of Contents
- Why Construction Tops the High-Risk Chart
- High-Risk Construction Roles (Class Codes & 2025-26 Rates)
- How Carriers Calculate Construction Premiums
- Premium Trends Heading Into 2026
- State-by-State Rate Snapshot
- Company-Specific Pricing Examples
- Risk-Control Tactics That Actually Reduce Premiums
- Multi-State & Wrap-Up Policies for General Contractors
- Expert Tips to Lock-In Lower 2026 Quotes
- Frequently Asked Questions
Why Construction Tops the High-Risk Chart
Construction routinely records injury rates 60-80 % higher than the private-industry average, driven by falls, struck-by incidents and heavy-equipment accidents. According to the latest National Council on Compensation Insurance (NCCI) State of the Line update, construction lost-time claim frequency declined 5 % in 2024, yet severity rose 6 % for both medical and indemnity payments—keeping overall costs elevated. (ncci.com)
Key cost drivers:
- High manual-labor intensity – more muscular-skeletal and traumatic injuries.
- Job-site variability – new hazards appear each time crews move.
- Subcontractor layering – injuries can pull multiple legal entities into a claim.
- Rising wage base – 2024–25 U.S. construction wages rose 4 % annually, inflating indemnity payouts. (ncci.com)
High-Risk Construction Roles (Class Codes & 2025-26 Rates)
The table below distills the most common NCCI/WCIRB class codes for construction, paired with filed or average carrier rates per $100 of payroll in force for policy years 2025–2026 in major markets. Where dual-wage classifications apply (California), the higher wage code is shown second.
| Role / Trade | Class Code | 2025–26 Rate – California | 2025–26 Rate – New Jersey | 2025–26 Rate – Texas (Loss Cost) | National Typical Range* |
|---|---|---|---|---|---|
| Carpentry (structural) | 5403 / 5432 | $24.52 / $9.24 (hourly.io) | $11.45 (midlandinsurance.biz) | 1.97 (LC) | $8–$15 |
| Masonry | 5027 / 5028 | $16.00 † | $12.67 | 2.42 (LC) | $9–$17 |
| Electrical Wiring | 5190 / 5140 | $8.69 / $4.11 (hourly.io) | $3.85 | 1.15 (LC) | $3–$7 |
| Plumbing | 5183 / 5187 | $11.67 / $3.72 | $4.12 | 1.32 (LC) | $4–$8 |
| Roofing | 5552 / 5553 (CA) / 5551 (TX/NJ) | $27.80 † | $28.34 | 2.27 LC ⭢ $3.41 carrier rate (LCM 1.5) (tdi.texas.gov) | $9–$18 |
| Excavation | 6218 / 6220 | $11.24 / $7.57 | $14.90 ‡ | 1.88 (LC) | $6–$12 |
| HVAC Install | 5538 / 5542 | $11.48 / $4.89 | $5.23 | 1.40 (LC) | $4–$9 |
*Source: blended carrier filings aggregated by The Hartford, WCIRB, Texas DWC and state rating bureaus, 2025.
†Filed WCIRB rates effective 9/1/2024, still current for 2026 pending September filing.
‡Mid-Atlantic regional composite from carrier quotes.
Takeaway: Roofing, carpentry and masonry consistently occupy the premium apex, while dual-wage splits in California can cut rates 60 % or more for higher-paid crews.
How Carriers Calculate Construction Premiums
- Class Code Rate
• Each worker is assigned a classification; the rate is expressed per $100 payroll. - Annual Payroll
• Verified post-policy via audit. - Experience Modification Rate (EMR)
• Industry-specific benchmark = 1.00. A sterling safety record can drive EMR to 0.70 (30 % credit); poor history can spike to 1.50+. - Schedule Credits / Debits
• Carrier-discretionary ±25 % adjustments for safety culture, drug testing, OSHA records, etc. - State Assessments & Terrorism Fees
• New York 2025 assessment = 7.1 % of standard premium. (linkedin.com) - Premium Discounts
• Applied on tiered payroll thresholds (e.g., –6 % on the first $100k, –9 % thereafter).
Formula Example – Texas Roofer (Code 5551)
Loss cost 2.27 × LCM 1.50 = $3.41 carrier rate. Multiply by $750,000 payroll → $25,575 manual premium. EMR 0.92, –5 % schedule credit, +2 % assessment → $22,838 final annual premium.
Premium Trends Heading Into 2026
| Metric | 2023 | 2024 | 2025 (prelim.) |
|---|---|---|---|
| Net written premium (private carrier) | $42.9 B | $41.6 B | $40.8 B* |
| Calendar-year combined ratio | 87 % | 86 % | 88 % (est.) |
| Lost-time claim frequency | –4 % | –5 % | –3 % |
| Indemnity severity growth | +6 % | +6 % | +5 % |
*Direct written premium through Q2 2025 indicated a –1.9 % YoY dip. (ncci.com)
Key trendlines impacting construction:
- Payroll growth (≈ 4 % / yr) offsets declining claim counts, keeping pure premiums relatively flat. (ncci.com)
- Medical inflation for ortho & trauma procedures (common in falls) is outpacing CPI at 6–7 %.
- Carrier appetite shift: Several A-rated insurers tightened underwriting on residential roofing and scaffolding trades in late-2025, nudging average rates 4–6 % higher for those specialties.
- Rate filings:
- California WCIRB proposes a –0.9 % advisory decrease effective 9/1/2026 (awaiting CDI approval).
- Florida submitted a –3.3 % overall rate cut for 1/1/2026, ninth straight year of reductions, though high-risk construction codes will still exceed $10 per $100 payroll.
State-by-State Rate Snapshot
Below is a mid-2025 snapshot of composite workers’ comp rates across all industries vs. high-risk construction averages, illustrating how geography alone can swing premiums 2-3×.
| State | Avg. All-Industry Rate | High-Risk Construction Band | Comment |
|---|---|---|---|
| California | $1.34 (kickstandinsurance.com) | $9–$28 | Dual-wage thresholds reward higher-paid crews. |
| New York | $1.10 (simplyinsurance.com) | $10–$20 | 7.1 % assessment adds to costs. |
| New Jersey | $1.00 | $12–$28 | Carpentry $11.45; Roofing $28.34. (midlandinsurance.biz) |
| Texas | $0.57 | $3–$18 | Opt-out option exists, but GC contracts usually mandate coverage. |
| Florida | $1.04 | $7–$22 | Significant rate spread by trade; state proposes 2026 reduction. |
| Colorado | $0.71 | $6–$16 | Competitive state fund keeps rates moderate. |
Tip: Even if your home state posts a low average rate, high-risk construction classes will still command 10–25× the clerical benchmark.
Company-Specific Pricing Examples
- The Hartford – Small-business construction accounts (payroll < $300k) paid $1,032 average annual workers’ comp premium in 2025 across all class codes. (thehartford.com)
- Travelers – Texas roofing accounts quoted at $3.25–$3.70 per $100 payroll (rate = LC 2.27 × LCM 1.43–1.63).
- State Compensation Insurance Fund (CA) – 2025 filed rate for Code 5403 (Carpentry) = $26.35, but preferred-tier policyholders with EMR ≤ 0.90 receive –15 % schedule credit, dropping to $22.40.
- Benchmark Case Study – NYC Framing Contractor
- Payroll: $2.4 M
- Class codes: 5403 (80 %), 5645-RESS Code (20 %)
- EMR: 1.08
- Carrier rate: $14.00 (5403), $18.50 (5645)
- Total annual premium 2025: $373,248
- Projected 2026 renewal with 5 % safety credit and EMR drop to 0.98 → $337,902 (≈ 9.5 % saving).
Risk-Control Tactics That Actually Reduce Premiums
1. Dual-Wage Class Strategy (CA only).
Pay carpenters $41 +/hr. and code them 5432 (rate $9.24) instead of 5403 (rate $24.52), slashing premium nearly 62 %. (hourly.io)
2. Experience-Mod Optimization.
Implement a post-injury return-to-work program. NCCI data suggests each lost-time claim avoided lowers EMR 0.02–0.04 points.
3. Site-Specific Safety Plans (SSSPs).
Carriers now give up to 10 % schedule credits for documented SSSPs, toolbox talks and OSHA-10 compliance.
4. Wearable Tech & Telematics.
Fall-detection vests and equipment telematics cut claim frequency > 20 % in pilot studies, opening doors for negotiated credits.
5. Leverage Owner-Controlled Insurance Programs (OCIPs).
Large projects ($50 M+) can consolidate subs under a wrap-up, averaging 15–20 % premium savings vs. stand-alone policies.
Multi-State & Wrap-Up Policies for General Contractors
Operating across state lines triggers extraterritorial coverage requirements. Inconsistent policy wording can cause coverage gaps when crews cross borders for a day’s work.
Best Practices
- Add Other States endorsement for any state where you might perform incidental work.
- For major projects, consider an OCIP / CCIP wrap-up:
- One master workers’ comp policy insures every enrolled subcontractor.
- Centralizes claims management; lowers litigation risk over “statutory employer” disputes.
- Mandated safety orientation and drug testing reduces frequency, benefiting all participants.
Expert Tips to Lock-In Lower 2026 Quotes
- Start quoting 90 days out. Carriers allocate construction capacity early each quarter.
- Shop loss-sensitive plans (large deductibles or retros) if premiums exceed $200k.
- Bundle GL + Comp with the same carrier (e.g., The Hartford, Liberty Mutual) for package credits.
- Present a proactive claim-review letter highlighting corrective actions taken after each loss.
- Attend carrier safety workshops—some insurers give instant 5 % credit for certificated attendance.
Internal Resources for Deeper Industry Insights
- Healthcare Worker Injuries: Tailoring Workers' Compensation Insurance Coverage
- Trucking & Logistics: Navigating Interstate Workers' Compensation Insurance Challenges
- Manufacturing Plant Safety Strategies to Reduce Workers' Compensation Insurance Expenses
These guides expand on sector-specific risks, complementing the construction focus of this article.
Frequently Asked Questions
Q1. What is the cheapest state for construction workers’ comp in 2026?
Texas posts the lowest average loss costs, but high-risk construction rates still hover $3–$7 per $100 payroll after carrier loadings.
Q2. Can I avoid coverage by hiring 1099 subcontractors?
No. Most states—including California and New York—deem prime contractors “statutory employers.” If a sub lacks valid coverage, the GC’s policy (or state fund) will pay the claim and back-bill premium.
Q3. How quickly will a single severe claim impact my EMR?
Experience mod calculations lag one full policy year. A $200k indemnity claim in 2024 will feed into the 2026 rating, potentially adding 0.07–0.12 points for three policy years.
Q4. Are wrap-up policies worth the administrative hassle?
Yes—if project value ≥ $50 M or involves vertical construction over five stories. Savings often exceed the OCIP administrative fee by 2:1.
Bottom Line
Construction remains America’s highest-risk, highest-premium sector for workers’ compensation insurance. Yet premiums are manageable when contractors:
- Classify payroll accurately,
- Control losses, and
- Capitalize on every available credit.
Use this 2026 guide as your roadmap to benchmark rates, implement safety strategies, and negotiate the most competitive quotes—keeping your projects profitable and your workforce protected.