7 Best Workers’ Compensation Insurance Companies for Startups in 2025: The Ultimate Protection Guide

Introduction: Why Startups Cannot Ignore Workers’ Comp

In the fast-paced ecosystem of US startups, founders often prioritize product development and scaling over administrative safety nets. However, ignoring workers’ compensation insurance is a financial risk that can capsize even the most promising venture before it truly begins.

As we move into 2025, the legal landscape for small business insurance is becoming increasingly stringent. Most states require you to carry coverage as soon as you hire your first employee. This is not just about legal compliance; it is about financial survival. A single workplace injury can lead to medical bills and lost wage claims totaling tens of thousands of dollars. Without proper commercial insurance coverage, these costs come directly out of your startup’s runway.

This guide provides a deep dive into the seven best providers available right now. We analyzed them based on financial strength, digital ease of use (critical for agile startups), “pay-as-you-go” billing options, and claim satisfaction rates.

Whether you are a remote-first tech company or a brick-and-mortar retail operation, finding the right business insurance quote is the first step toward securing your company’s future.

Understanding Workers’ Compensation Costs in 2025

Before we examine the providers, it is vital to understand what you are paying for. Workers’ compensation rates are not arbitrary. They are calculated using a specific formula that underwriters use to determine risk.

The Pricing Formula

The standard formula for your premium is:

$$\text{Premium} = \left( \frac{\text{Payroll}}{100} \right) \times \text{Class Code Rate} \times \text{Experience Modifier}$$

1. Payroll: Your total gross payroll for the year.
2. Class Code Rate: Every job has a classification code (e.g., a software engineer has a much lower risk rate than a construction worker).
3. Experience Modifier (E-Mod): A multiplier based on your claims history. Startups usually begin with a neutral score of 1.0.

Current Market Rates by State (Live Analysis)

According to recent 2024 and projected 2025 data, costs vary significantly by location.

• Lowest Cost States: North Dakota, West Virginia, and Arkansas are currently seeing some of the lowest rates per $100 of payroll.
• Highest Cost States: New Jersey, California, and New York remain among the most expensive due to higher medical costs and state regulations.

Tip for Founders: If you are a remote-first startup, your premiums will often be based on where your employees live, not just where your HQ is registered. This is a critical factor when calculating your business insurance costs.

1. The Hartford: Best Overall for Comprehensive Coverage

The Hartford consistently ranks as the top choice for small businesses and startups. With over 200 years of experience, they have adapted their massive institutional knowledge to fit the modern digital age.

Why It Wins for Startups

The Hartford excels because of its “Small Business Advantage” program. They understand that a startup with three employees today might have fifty employees next year. Their policies are scalable.

Key Features:

• Pay-As-You-Go Billing: This is a game-changer for cash flow. Instead of a massive upfront lump sum, The Hartford integrates with major payroll providers (like Gusto or ADP) to deduct premiums based on actual payroll each pay period.
• Preferred Medical Network: They have a vast network of healthcare providers, which helps control claim costs and gets employees back to work faster.
• Bundling Discounts: You can combine workers’ comp with General Liability or a Business Owners Policy (BOP) for significant savings.

Pros:

• Superior digital dashboard for managing certificates of insurance.
• Strong financial backing (A+ rating).
• Excellent claims handling reputation.

Cons:

• Can be slightly more expensive than budget-tier online carriers.

Best For:

Startups that want a “set it and forget it” reliable partner that can scale from Seed stage to IPO.

Source: The Hartford Small Business Insurance

2. Next Insurance: Best for Digital Experience and Speed

If you need a certificate of insurance (COI) in the next ten minutes to close a deal or sign a lease, Next Insurance is your answer. Founded specifically to disrupt the traditional insurance market, Next utilizes AI and machine learning to provide instant quotes.

The “Instant” Advantage

Next Insurance has removed the friction from the buying process. There are no long phone calls with agents. You answer a few questions on their mobile-friendly site, and the algorithm generates a tailored policy immediately.

Key Features:

• Live Unlimited COIs: You can generate custom certificates of insurance for different vendors or clients instantly through their app, 24/7.
• Competitive Rates: By cutting out traditional agent commissions and using tech to assess risk, Next often provides some of the most affordable small business insurance quotes on the market. Rates can start as low as $14 per month for low-risk professions.
• Bundled Packages: They specialize in creating packages for specific verticals, such as “E-commerce,” “Consultants,” or “Fitness Professionals.”

Pros:

• Incredible user interface and mobile app.
• Fastest quote-to-bind time in the industry.
• Tailored specifically for micro-businesses and solopreneurs.

Cons:

• Coverage limits might be too low for larger, industrial-scale operations.
• Customer service is primarily digital/chat-based.

Best For:

Tech startups, freelancers, and founders who prioritize speed and mobile management.

Source: Next Insurance Workers Comp

3. biBERK: Best for Direct Savings

biBERK is a part of the Berkshire Hathaway Insurance Group. This means two things: they have the massive financial stability of Warren Buffett’s empire, and they operate on a direct-to-consumer model that eliminates the middleman.

The Cost-Cutting Strategy

Because biBERK sells directly to you rather than through third-party brokers, they claim to save business owners up to 20% on premiums. For a bootstrapped startup, those savings are significant.

Key Features:

• Focus on Compliance: biBERK is excellent at helping first-time founders understand exactly what is legally required in their specific state to avoid fines.
• Financial Strength: Rated A++ (Superior) by AM Best. You never have to worry about the company’s ability to pay out a claim.
• Simple Online Management: Like Next, they offer a robust online portal for managing policies and claims.

Pros:

• Potential for the lowest premiums due to the direct model.
• Backed by one of the strongest financial entities in the world.
• Quick online quoting process.

Cons:

• Customer service can sometimes be slower compared to premium carriers.
• Stricter underwriting guidelines (they might decline higher-risk startups).

Best For:

Budget-conscious founders who want the reliability of a big brand without the broker fees.

Source: biBERK Business Insurance

4. Pie Insurance: Best for Specialized Workers’ Comp

Unlike other providers on this list that offer every type of insurance under the sun, Pie Insurance focuses almost exclusively on workers’ compensation. This specialization allows them to underwrite risks that other generalist carriers might misunderstand or overprice.

Data-Driven Underwriting

Pie uses granular data analytics to determine risk. This means they can often approve small businesses that have unique risk profiles or are in “grey area” industries. They partner with unparalleled underwriting companies to offer A- rated coverage.

Key Features:

• Easy Payroll Integration: They offer “Pie-as-you-go” billing to prevent audit surprises at the end of the policy term.
• Claims Advocacy: Because they specialize in workers’ comp, their claims adjusters are experts in navigating the specific medical and legal complexities of employee injury law.
• Partner Agent Network: While you can buy direct, Pie also works heavily with local agents if you prefer a human touch.

Pros:

• Highly competitive rates, often claiming 30% savings.
• Accepts a wider variety of class codes than some digital-only competitors.
• Excellent review scores for onboarding.

Cons:

• Limited product lines (you will need to go elsewhere for General Liability).
• Not available in all 50 states yet (though they cover the vast majority).

Best For:

Startups in niche industries or those who want a specialist dedicated solely to employee protection.

Source: Pie Insurance

5. Travelers: Best for Retail and Complex Risks

Travelers is a giant in the industry. While they might feel like a “traditional” carrier, they are the best choice if your startup involves physical goods, retail spaces, or complex supply chains.

Risk Management Expertise

Travelers offers more than just a payout; they offer prevention. They provide access to risk management specialists who can help you analyze your workspace (even virtually) to prevent accidents before they happen.

Key Features:

• TravComp®: Their proprietary claim management system allows for seamless communication between the injured employee, the employer, and the medical provider.
• Medical & Return-to-Work Programs: They have sophisticated programs designed to help injured employees recover and return to the workforce, which lowers the long-term impact on your premiums.
• Industry-Specific Packages: They have highly specific policies for technology offices, retailers, and financial institutions.

Pros:

• Unmatched depth of coverage and policy limits.
• High-end support for claims and legal defense.
• Great for startups that also need Cyber Liability or complex property insurance.

Cons:

• Often requires working through an independent agent (slower quote process).
• Generally higher premiums than the “insurtech” disruptors.

Best For:

Startups with physical inventory, retail storefronts, or those nearing a growth stage where risk complexity increases.

Source: Travelers Business Insurance

6. Hiscox: Best for Consultants and Independent Contractors

Hiscox was one of the first major insurers to pivot toward the “micro-business” economy. They are particularly strong for white-collar startups, consultants, IT contractors, and marketing agencies.

The Professional’s Choice

Hiscox understands that for many modern startups, the “workplace” is a home office or a co-working space. Their policies are designed to cover these lower-physical-risk environments effectively without overcharging.

Key Features:

• 14-Day Free Look: In many scenarios, they offer a window where you can cancel the policy without penalty if you find it doesn’t meet your needs.
• Immediate Coverage: You can buy online and be covered instantly.
• Global Reach: As an international insurer, Hiscox has a unique understanding of businesses that might have cross-border interactions (though workers’ comp is strictly state-regulated).

Pros:

• Specializes in professional services.
• Flexible payment options (monthly or annual).
• Very high customer satisfaction ratings for ease of purchase.

Cons:

• They may farm out workers’ comp policies to partners in states where they do not underwrite directly.

Best For:

Consulting firms, marketing startups, and SaaS companies with small, office-based teams.

Source: Hiscox Small Business

7. Progressive Commercial: Best for Bundling with Auto

You likely know Progressive for car insurance. If your startup involves a fleet of vehicles delivery vans, sales cars, or service trucks—Progressive Commercial is a top contender.

The Power of the Progressive Advantage

Progressive uses the “Progressive Advantage Business Program.” While they underwrite their own commercial auto, they often partner with other top-tier carriers (including some on this list) to provide workers’ comp. This makes them a powerful “one-stop-shop” aggregator.

Key Features:

• Fleet Discounts: If you insure your business vehicles with them, adding workers’ comp and liability can trigger significant multi-policy discounts.
• Broad Acceptance: They are known for insuring businesses that others might label “high risk,” such as construction or heavy delivery services.
• 24/7 Service: As a major national brand, their support lines are always open.

Pros:

• Excellent if your business is mobile or vehicle-dependent.
• One login for Auto, GL, and Workers’ Comp.
• Trusted household brand name.

Cons:

• The workers’ comp policy is often serviced by a partner, not Progressive directly.

Best For:

Logistics startups, delivery services, and trades-based businesses.

Source: Progressive Commercial

How to Choose the Right Provider: A Step-by-Step Guide

Selecting the best provider is not just about clicking the lowest price. Here is a strategic workflow for founders.

Step 1: Audit Your Risk

Before getting a quote, define your operations clearly.

• Do you have employees driving personal cars for work?
• Do you have remote employees in different states?
• Do you utilize heavy machinery?

Accurate classification codes are the secret to lower rates. If you classify a software developer as “clerical support” versus “sales,” the rate might differ. Ensure your agent or the digital form captures the exact nature of the work.

Step 2: Compare Quotes for High-Value Keywords

When searching for coverage, you want to compare “apples to apples.” Ensure the liability limits (e.g., $100,000 per occurrence / $500,000 policy limit) are identical across all quotes.

Step 3: Check the “Pay-As-You-Go” Option

For a startup, cash flow is oxygen. Avoid carriers that demand 100% of the estimated annual premium upfront. Look for providers that link to your payroll software (QuickBooks, Gusto, Zenefits) to pay premiums in real-time. This prevents the dreaded “audit shock” at the end of the year where you might owe thousands if you hired more people than expected.

Step 4: Verify the Carrier’s Financial Rating

Always check the AM Best rating. You want a carrier rated ‘A-‘ or higher. In the unfortunate event of a severe employee injury lawsuit, you need a carrier with the liquidity to cover settlements that could reach into the millions.

Frequently Asked Questions (FAQ)

Is workers’ compensation mandatory for startups?

In most US states, yes. The moment you hire your first W-2 employee, you are legally required to have coverage. Some states (like California) are very strict, while others (like Texas) have opt-out provisions, though opting out opens you to massive lawsuit liability.

Does workers’ comp cover remote employees?

Yes. If a remote employee is injured “in the course and scope” of their employment—even in their home office—they are typically eligible for benefits. This makes obtaining proper business insurance coverage vital for remote-first companies.

How much does workers’ comp insurance cost for a startup?

For low-risk office startups, costs can be as low as $0.25 to $0.50 per $100 of payroll. For higher-risk industries, it can exceed $10.00 per $100. The average small business pays between $40 and $70 per month.

Can I buy workers’ comp coverage online?

Absolutely. Providers like Next Insurance, biBERK, and Pie Insurance have made the process entirely digital. You can get a quote and bind a policy in under 15 minutes.

Conclusion: Secure Your Growth Today

Building a startup is inherently risky, but your insurance coverage shouldn’t be. By partnering with one of these top seven providers, you transfer the financial risk of workplace injuries off your balance sheet and onto theirs.

The Hartford offers the best all-around protection; Next Insurance provides the ultimate speed for digital natives; and biBERK offers aggressive savings.

Don’t wait for an accident to happen. The cost of coverage is a fraction of the cost of a single claim.