How Roofers Can Qualify for Lower Workers' Comp Premiums
- Jun 29
- 5 min read
If you’re a roofing contractor, you’ve probably opened a workers’ comp quote and felt the sticker shock. Maybe a general contractor is asking for a certificate, or you’re worried about your next audit driving costs even higher. You’re not alone—roofing is one of the most expensive trades for workers’ comp.
The good news is that how roofers can qualify for lower workers' comp premiums isn’t complicated once you understand what drives your costs. There are real, practical steps you can take to reduce your premium and keep your business protected.
The Quick Answer: How Roofers Can Lower Workers’ Comp Premiums
If you want a simple roadmap, focus on these key areas:
Improve jobsite safety to reduce claims
Keep your experience mod (EMR) low
Use accurate class codes for different roles
Track payroll correctly to avoid audit surprises
Confirm subcontractors carry their own coverage
Consider pay-as-you-go billing for better accuracy
Workers’ comp pricing is based on risk. When you reduce risk, your premium may go down over time.
How Workers’ Comp Premiums Are Calculated
Before you can lower your premium, it helps to know how it’s built.
Workers’ comp is generally priced per $100 of payroll. That means your total premium depends on how much you pay your workers and the type of work they do.
Your cost is typically based on:
Payroll
Class codes
Experience modification rate (EMR)
State-specific rules and market conditions
Rates vary widely by state and roofing operations, so no two contractors pay exactly the same.
The Role of Class Codes in Your Premium
A class code is a number used to describe the type of work your employees perform. Each code reflects a different level of risk.
Roofing class codes are higher because the work involves:
Working at heights
Handling tools and materials
Increased chance of serious injuries
If your entire team is placed under a high-risk roofing class code, your premium will reflect that risk.
However, many roofing businesses have a mix of roles.
For example:
Roof installers → high-risk roofing code
Office staff → low-risk clerical code
Separating these roles correctly can help prevent overpaying.
How Your Experience Mod (EMR) Impacts Cost
Your experience mod, or EMR, is a number that compares your claims history to similar businesses.
Think of it as a score for your safety record:
1.0 = average
Below 1.0 = fewer or less severe claims
Above 1.0 = more or higher-cost claims
A lower EMR may help reduce your premium, while a higher EMR can increase it.
Improving your EMR takes time, but it starts with reducing injuries on your job sites.
Improve Jobsite Safety to Lower Costs
Safety is one of the most important ways to control your workers’ comp costs.
Fewer claims mean a better EMR, which may lower your premium over time.
Focus on:
Fall protection systems and harness use
Ladder safety
Heat illness prevention
Regular safety meetings
Consistent training and enforcement can make a real difference. OSHA provides helpful roofing safety guidance here: https://www.osha.gov/roofing
Keep Payroll Accurate and Up to Date
Payroll directly affects your workers’ comp premium because it represents your exposure to risk.
At the beginning of your policy, you estimate your payroll. At the end, a workers’ comp audit checks your actual numbers.
If your estimate is too low, you may owe additional premium. If it’s too high, you may have paid more than necessary upfront.
Keeping accurate records helps avoid large surprises and keeps your costs predictable.
Understanding Workers’ Comp Audits
A workers’ comp audit happens at the end of your policy term. It reviews your payroll and job classifications to make sure everything matches what was reported.
During an audit, you may need to provide:
Payroll reports
Tax documents
Employee job descriptions
Subcontractor certificates
Good recordkeeping makes this process smoother and reduces the chance of errors that could increase your premium.
1099 vs. Employee Classification
One common mistake roofing contractors make is misclassifying workers as independent contractors.
A 1099 worker is typically an independent contractor, but not everyone qualifies. If someone:
Works under your direction
Uses your tools
Performs core roofing work
They may be considered an employee for workers’ comp purposes.
If workers are misclassified, their payroll may be added during an audit, which can increase your premium and create compliance issues.
Because rules vary by state, always confirm with your state agency or a licensed agent.
Why Subcontractor Insurance Matters
Subcontractors can affect your workers’ comp costs in a big way.
If a subcontractor does not carry their own workers’ comp policy, their payroll may be included in your audit.
To protect your business:
Collect certificates of insurance (COIs) before work starts
Confirm the policy is active
Keep documentation on file
This simple step can prevent unexpected cost increases.
Use Pay-As-You-Go Workers’ Comp
A pay-as-you-go workers’ comp policy allows you to pay based on actual payroll instead of estimates.
Instead of guessing your annual payroll, your premium adjusts as you run payroll.
Benefits include:
Better cash flow
More accurate billing
Reduced audit surprises
This option is especially helpful for roofing contractors with seasonal or changing workloads.
You can learn more about how these systems work through general industry information at https://www.ncci.com
Do Ghost Policies Help Lower Premiums?
A ghost policy is a workers’ comp policy with no payroll. It’s often used by owner-only businesses.
Roofers may use ghost policies when:
A general contractor requires proof of insurance
They don’t have employees but want to bid jobs
However:
Ghost policies typically do not cover the owner’s injuries
They are not a cost-saving tool for businesses with employees
They serve a specific purpose but don’t reduce premiums for active crews.
State Rules Can Impact Your Costs
Workers’ comp requirements vary significantly by state, and those differences can affect your premium.
For example:
Some states require coverage with one employee
Others allow certain exemptions
Texas operates differently from most states
Because rules can change, always:
Check with your state’s workers’ comp board
Review your policy regularly
Work with a licensed agent
Work With a Specialist Who Knows Roofing
Roofing is a high-risk trade, and workers’ comp for roofers is more complex than standard business coverage.
A specialist can help you:
Assign proper class codes
Identify cost-saving opportunities
Avoid audit issues
Stay compliant with state rules
Small adjustments in how your policy is set up can make a big difference over time.
FAQ: How Roofers Can Lower Workers’ Comp Premiums
What is the fastest way to lower my workers’ comp premium?
Improving jobsite safety and reducing claims is one of the most effective long-term strategies.
Do class codes really make a big difference?
Yes. Class codes are a major factor in pricing. Incorrect classifications can significantly increase your premium.
How does EMR affect my insurance cost?
Your EMR reflects your claims history. A lower EMR may reduce your premium, while a higher EMR can raise it.
Do subcontractors impact my workers’ comp policy?
Yes. If they don’t carry their own coverage, their payroll may be included in your audit.
Is workers’ comp required for all roofing businesses?
In most states, it’s required if you have employees. Requirements vary, so confirm with your state or a licensed agent.
Get Help Lowering Your Workers’ Comp Premium
Lowering your workers’ comp premium isn’t about finding shortcuts—it’s about understanding what drives your costs and making smart adjustments over time.
If you want help reviewing your policy, improving your setup, or finding ways to reduce your premium, Total Work Comp is here to help.
Request a free workers’ comp quote today and get expert guidance tailored to your roofing business.
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