Why Roofing Workers' Comp Costs So Much (and How to Lower It)
- Jun 29
- 5 min read
If you’re a roofing contractor, you’ve probably had sticker shock when you first looked at workers’ comp. Maybe a GC asked for a certificate and the quote came back higher than expected—or you’re worried about an audit coming up.
You’re not alone. Why roofing workers' comp costs so much (and how to lower it) is one of the most common questions we hear—and the good news is, once you understand what drives cost, you can start controlling it.
Why Roofing Workers’ Comp Costs So Much (Quick Answer)
Roofing workers’ comp costs more than most industries because it’s considered high risk. Insurance companies price policies based on injury risk, and roofing involves hazards like working at heights, lifting heavy materials, and exposure to weather.
Your premium is based on:
Payroll (priced per $100 of payroll)
Class codes (your type of work)
Experience mod (your claims history)
State rules and rate structures
Because roofers have a higher chance of claims, rates are typically higher—but there are ways to manage and reduce those costs over time.
The Real Reason Roofing Is High-Risk
Insurance companies look at one thing first: the likelihood of injury.
Roofing has several risk factors that drive claims:
Working at heights where falls can occur
Frequent ladder use
Heat exposure, especially in warmer states
Heavy lifting of shingles and materials
Use of sharp tools and equipment
According to general safety guidance from OSHA (https://www.osha.gov/roofing), falls are one of the leading causes of serious jobsite injuries in construction.
Because of this, roofing businesses are placed into higher-risk insurance categories.
How Roofing Workers’ Comp Is Priced
Understanding how your premium is calculated helps explain why it may feel expensive—and where you can make improvements.
Payroll-Based Premium
Workers’ comp is priced based on payroll.
Here’s how it works:
Your total payroll is divided into units of $100
Each unit is multiplied by a rate assigned to your job type
So if your payroll grows, your premium will usually increase as well.
Rates vary widely by state and trade, but the payroll-based model is standard across the industry.
Class Codes Explained
Class codes are four-digit numbers that describe the work your employees perform.
For roofing businesses:
Field workers (installers, laborers) fall into high-risk class codes
Office staff can be classified under lower-risk codes
If all your employees are grouped under roofing, even office workers, you may be paying more than necessary.
Getting class codes right is one of the fastest ways to avoid overpaying.
Experience Mod (EMR)
Your experience mod, or EMR, is a number that compares your claims history to similar businesses.
1.00 = industry average
Above 1.00 = worse-than-average claims
Below 1.00 = better-than-average claims
A higher EMR increases your premium. A lower EMR can reduce it.
Your EMR is one of the most important long-term cost drivers.
State Differences Play a Role
Workers’ comp is regulated at the state level, so costs vary depending on where you operate.
Some states have higher base rates
Others have stricter requirements
Texas handles workers’ comp differently than most states
Because rules change, it’s important to confirm details with a licensed agent or review general information from a resource like the U.S. Department of Labor at https://www.dol.gov/agencies/owcp/workers-compensation.
Other Factors That Drive Roofing Workers’ Comp Costs
Beyond the main pricing formula, a few additional factors influence what you pay.
Claims History
If your company has had multiple claims—or one large claim—your costs may increase.
Claims affect your EMR and can impact pricing for several years.
Safety Practices
Companies that prioritize safety tend to have:
Fewer injuries
Lower claim frequency
Better long-term rates
Safety isn’t just about compliance—it directly affects your bottom line.
Employee vs. 1099 Classification
In roofing, worker classification is a big deal.
Employees typically must be covered by workers’ comp
Independent contractors (1099) may not require coverage
But misclassifying employees as contractors can lead to:
Audit penalties
Back premiums
Legal issues
Each state defines classification differently, so accuracy is critical.
Workers’ Comp Audits and Why They Matter
A workers’ comp audit happens at the end of your policy period.
This process checks:
Your actual payroll
Your class codes
Your subcontractor payments
If your payroll was higher than estimated, you may owe additional premium. If it was lower, you could receive a refund.
Roofers often face audit surprises due to:
Unreported payroll
Misclassified workers
Poor recordkeeping
Staying organized year-round can prevent large audit bills.
What Is a Ghost Policy?
A ghost policy is a workers’ comp policy with no payroll.
Roofing business owners sometimes use ghost policies to:
Meet general contractor requirements
Show proof of coverage
Bid on jobs
However, ghost policies do not cover employees. If you hire workers, you need real coverage in place.
Pay-As-You-Go Workers’ Comp
A pay-as-you-go policy allows you to pay premiums based on actual payroll instead of estimates.
Benefits include:
More accurate payments
Better cash flow
Fewer audit surprises
This setup works well for roofing companies with changing crew sizes.
How to Lower Roofing Workers’ Comp Costs
Even though roofing is high risk, there are practical ways to reduce your premium.
Improve Jobsite Safety
Fewer injuries usually mean lower claims—and lower long-term costs.
Focus on:
Fall protection systems
Safety training
Regular inspections
Safety improvements can reduce both risk and expenses over time.
Separate Your Class Codes
Make sure office employees are not grouped with roofers.
Clear classification prevents paying high rates on low-risk work.
Manage Claims the Right Way
The way you handle claims matters.
Best practices:
Report injuries immediately
Stay in contact with injured workers
Offer return-to-work options
This can help minimize the impact on your EMR.
Keep Payroll Accurate
Accurate payroll reporting helps you avoid:
Overpaying upfront
Large audit bills later
Consistency is key.
Work With a Specialist
Roofing workers’ comp is complex, and not every agent understands the details.
A specialist can help:
Review your policy
Identify misclassification issues
Find cost-saving opportunities
Keep you compliant with state rules
This often leads to better long-term results.
Common Mistakes That Increase Costs
Avoid these common issues:
Misclassifying employees as 1099 contractors
Mixing office and field payroll
Ignoring safety programs
Underreporting payroll
Not preparing for audits
Each of these can increase your premium or lead to unexpected charges.
FAQ: Roofing Workers’ Comp Costs
Why is roofing workers’ comp so expensive?
Roofing is a high-risk trade with a higher chance of injury, especially due to falls. Higher risk leads to higher insurance costs.
Can roofing companies reduce their workers’ comp premiums?
Yes. Improving safety, managing claims, and ensuring accurate classification can help lower costs over time.
Is workers’ comp required for roofers?
In most states, yes—especially if you have employees. Requirements vary, so confirm with your state or a licensed agent.
What is the biggest factor in workers’ comp cost?
Payroll and claims history are typically the largest factors, along with your class code.
Can I avoid workers’ comp by using subcontractors?
Not always. Misclassifying workers can lead to penalties and audit costs. It’s important to follow state guidelines carefully.
Get Help Lowering Your Roofing Workers’ Comp Costs
Roofing workers’ comp may always be a higher-cost category—but that doesn’t mean you have to overpay.
With the right structure, safety practices, and guidance, you can take control of your premium and avoid surprises.
If you want help reviewing your current policy or exploring better options, Total Work Comp is here to help.
Request a free workers’ compensation quote today and see what may be possible for your roofing business.
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