Is Your Workers Comp Premium Decreasing? If It Isn’t…It Should Be! (2025)

Is Your Workers Comp Premium Decreasing? If It Isn’t…It Should Be! (2025)

If you’re a business owner, here’s some good news: workers compensation insurance is one of the few lines of business coverage where rates are trending downward in 2025. But what if your premium isn’t decreasing? Let’s break down why rates are falling, what might keep your premium higher, and how you can take advantage of today’s "soft" workers comp insurance market.

Why Workers Comp Rates Are Decreasing

Workers compensation has been profitable for insurance companies in recent years. Claims frequency and severity are lower compared to other lines of coverage such as commercial property, commercial auto, and general liability. This has created strong competition among insurers—meaning better rates for well-managed businesses.

Several factors are driving these reductions:

• Safer Workplaces: Investments in employee training, stricter safety regulations, and technology advancements like automation have helped reduce workplace injuries.
• Fewer Severe Claims: Medical treatment improvements and faster return-to-work strategies are reducing long-term claim costs.
• Market Profitability: Because carriers are earning strong returns on workers comp, they can afford to offer lower rates.

Why Your Premium Might Not Be Going Down

Even in a soft market, not every business will see reductions. A few key factors can keep your premium higher:

• Industry Risk: High-hazard industries like construction or manufacturing may not see the same decreases.
• Payroll Growth: Premiums are partly based on payroll. If your workforce or wages have grown, your costs could still rise despite lower base rates.
• Experience Modification Factor (Mod): Your mod compares your claims history to others in your industry. A higher-than-average mod (due to frequent or severe claims) will keep your premiums up.

How to Lower Your Workers Comp Premium

If your costs aren’t going down—or you want to push them even lower—focus on these strategies:

• Strong Claims Management: Report claims quickly and work to resolve them efficiently. This helps minimize the long-term impact on your experience mod.
• Invest in Safety Programs: Training, prevention measures, and workplace safety technologies not only protect your employees but also improve your risk profile.
• Shop the Market: With rates being so competitive, it pays to compare multiple carriers. Independent agents can help you access the best options.
• Take Advantage of Discounts: Many insurers reward businesses that implement formal safety programs or use monitoring technology.
• Annual Policy Review: Make sure your payroll is accurate, employees are correctly classified, and your coverage reflects your current operations. Errors here can mean you’re overpaying.

Final Thoughts

Workers compensation is currently one of the few areas where businesses can save money on insurance. While other lines like property and auto continue to see rate increases, workers comp offers an opportunity to reduce costs.

If your premium isn’t trending downward in 2025, it’s time to take a closer look. Between claims management, safety initiatives, and shopping the market, there are plenty of ways to maximize your savings.

Need help reviewing your workers comp program? Reach out today to make sure your business is getting the best rate available in the marketplace.