Updated 17 April 2026
Business Insurance Cost by State 2026
California and New York have the highest commercial insurance premiums in the US. Texas is the only state where workers compensation is optional. North Dakota and Wyoming have the lowest rates.
Cost by State: 10 Key States
| State | GL Annual | WC Rate / $100 payroll | BOP Annual | Notes |
|---|---|---|---|---|
| California | $1,200-4,000 | $1.34 (private market) | $1,500-5,000 | Highest litigation rate, strict regulation |
| New York | $1,000-3,500 | $1.44 (competitive) | $1,200-4,500 | NYC premiums 40-60% above upstate |
| Texas | $600-2,000 | Optional (private or not) | $800-2,500 | Only state with optional WC for private employers |
| Florida | $700-2,500 | $0.88 (competitive) | $900-3,000 | Hurricane risk increases property costs |
| Illinois | $700-2,200 | $1.12 (competitive) | $900-3,000 | Chicago metro drives premium up |
| Pennsylvania | $600-2,000 | $1.02 (competitive) | $800-2,500 | Mid-range, Philadelphia higher |
| Georgia | $500-1,800 | $0.92 (competitive) | $700-2,200 | Growing market, premiums rising |
| Ohio | $500-1,800 | $0.74 (state fund only) | $700-2,200 | BWC monopoly state, no private WC |
| North Dakota | $400-1,200 | $0.58 (state fund only) | $500-1,400 | Lowest WC rates in the US |
| Wyoming | $400-1,200 | $0.62 (state fund only) | $500-1,500 | State fund monopoly, low claims environment |
State Fund vs Private Market States
Four states require employers to buy workers compensation through the state fund rather than private carriers: Ohio (BWC), North Dakota (WSI), Washington (L&I), and Wyoming (State Fund). All other states allow private market competition. This affects pricing, customer service, and your options for managing your WC policy.
What Drives State-Level Price Differences
| Factor | Impact | Detail |
|---|---|---|
| Litigation environment | 2-4x premium range | States with higher jury awards and more litigation have higher GL premiums. Louisiana, Florida, and New York are the most litigious commercial markets. |
| Workers comp regulations | Direct: 50-200% range | WC rates are filed and approved state-by-state. The regulatory approval process, state fund competition, and claims management rules vary significantly. |
| Property replacement costs | 15-40% range | Urban high-cost construction markets (NYC, SF, Chicago) have higher commercial property premiums because rebuilding is more expensive. |
| Hurricane and weather risk | 10-30% for property | Florida, Louisiana, and Gulf Coast states carry weather risk surcharges on commercial property. |
| Urban vs rural location | 20-60% swing | Within any state, urban premiums are 20 to 60 percent higher than rural for comparable businesses. |
See detailed workers comp rates by state and industry in our Workers Compensation Cost guide.