If you run a landscaping business, workers' compensation insurance probably feels like just another expense. But here's the reality: it's not optional in most states, and going without it can shut down your business overnight. Whether you're mowing lawns or installing hardscapes, understanding how workers' comp works—and what it actually costs—can save you thousands of dollars and keep you on the right side of the law.
Do You Actually Need Workers' Comp?
In 49 states, if you have employees, the answer is yes. Even one employee—full-time, part-time, seasonal, or temporary—triggers the requirement. California is particularly strict: there are zero exceptions. If someone is on your payroll and you direct their work, they must be covered.
A few states have higher thresholds. Georgia and North Carolina only require coverage when you have three or more employees. And Texas? It's the outlier—workers' comp is completely optional there. Oklahoma also makes it optional for businesses with two or fewer employees.
One common mistake: assuming 1099 contractors don't count. In many states, if you control how and when they work, they're legally considered employees and must be covered. Check your state's rules carefully—misclassifying workers can lead to massive fines.
Four states—North Dakota, Ohio, Washington, and Wyoming—require you to purchase coverage through a state fund rather than a private insurer. You don't have a choice of carriers in these states.
Understanding Class Codes and What They Mean for Your Premium
Your workers' comp premium isn't one-size-fits-all. It's calculated based on classification codes that reflect the risk level of different jobs. The National Council on Compensation Insurance (NCCI) assigns these codes, and they vary dramatically in cost.
For landscaping, the main codes are:
Code 9102 (Lawn Maintenance): This covers basic lawn care—mowing, trimming, edging. It's the least expensive at around $2.33 per $100 of payroll. If your crew only handles routine lawn upkeep, this is your code.
Code 0042 (Landscape Gardening): This applies to comprehensive landscaping services like planting trees, installing flower beds, mulching, and light hardscaping. The rate averages $4.39 per $100 of payroll—almost double the lawn care rate.
Code 5221 (Flat Concrete Work): If your business does patios, sidewalks, or driveways, you'll fall under this code at $4.37 per $100 of payroll.
Code 0106 (Tree Trimming): This is where costs spike. Tree work is dangerous, and the rate reflects it—$7.63 per $100 of payroll or higher in some states.
Pennsylvania and Delaware use their own system with code 0012 for landscaping contractors. If you operate in multiple states, your classification may change based on location.
Getting classified correctly matters. If you're coded as a tree trimmer when you only mow lawns, you're overpaying. If you're coded as lawn maintenance but your crew does hardscaping, you're underinsured and could face penalties during an audit.
What Actually Determines Your Cost
The average landscaping business pays about $169 per month, or $2,029 annually, for workers' comp in 2025. But your actual premium depends on three main factors: your class code rate, your payroll, and your experience modification rate (EMR).
Your class code rate is set by your state and reflects the risk level of your work. Rates for lawn care (code 9102) range from $1.45 per $100 of payroll in North Dakota to $5.22 in New Jersey. That's a 3.5x difference based purely on where you operate.
Your payroll is straightforward: the more you pay your employees, the higher your premium. Insurers calculate this per $100 of payroll, so if you have $100,000 in annual payroll and a rate of $4.39, you'll pay $4,390 in base premium.
But here's where it gets interesting: your experience modification rate (EMR or ExMod). This is a multiplier based on your claims history compared to similar businesses. The baseline is 1.0. If you have a clean safety record with no claims over several years, your EMR might drop to 0.85 or lower, reducing your premium by 15% or more. If you've had multiple claims, your EMR could climb to 1.25 or higher, increasing your cost by 25%.
Your EMR is recalculated annually based on your claims from the previous three years. This means one bad year with several injuries can haunt you for years. Conversely, maintaining a strong safety culture pays dividends—literally—by lowering your premiums year after year.
How to Lower Your Workers' Comp Costs
The single most effective way to reduce your workers' comp premium is to prevent injuries before they happen. This isn't just good business ethics—it's financial strategy.
Start with proper training. Make sure every crew member knows how to operate equipment safely and understands hazards specific to landscaping—heat exhaustion, chemical exposure, repetitive strain injuries, and equipment accidents. Regular safety meetings reinforce these practices.
Invest in proper personal protective equipment (PPE) and enforce its use. Safety glasses, gloves, hearing protection, and steel-toed boots should be non-negotiable. Equipment maintenance also matters—faulty mowers and trimmers are accidents waiting to happen.
Document everything. Keep detailed records of safety training, equipment inspections, and incident reports. If an injury does occur, having this documentation shows insurers you take safety seriously, which can help minimize the impact on your EMR.
Beyond safety, make sure your payroll reporting is accurate. Overstating payroll means you're overpaying. Understating it can lead to audits and retroactive bills. And verify your classification codes—if you're paying for a higher-risk code than your actual work warrants, you're leaving money on the table.
What Happens If You Skip It
Operating without workers' comp when it's required isn't a calculated risk—it's a business-ending mistake. Penalties vary by state but commonly include fines of thousands of dollars per day of non-compliance. Some states issue stop-work orders, which means you can't operate until you're insured and compliant.
If an employee gets injured and you're uninsured, you're personally liable for all medical costs, lost wages, and potential legal fees. A single serious injury could bankrupt your business. Even minor injuries can rack up tens of thousands in medical bills.
Commercial clients often require proof of workers' comp before awarding contracts. Property management companies, municipalities, and commercial property owners won't work with uninsured contractors. Skipping coverage doesn't just expose you to fines—it cuts you off from lucrative work.
Getting Started
If you're starting a landscaping business or hiring your first employee, don't wait to get coverage. Most states require you to have insurance in place before your employee's first day.
Start by verifying your state's specific requirements—some states have higher employee thresholds, and monopolistic fund states require you to go through the state system. Then, get quotes from multiple insurers or work with an independent agent who specializes in landscaping coverage. Make sure you're classified correctly based on the actual work your crew performs.
Once you're insured, commit to safety from day one. The investment you make in training, equipment, and prevention will pay for itself many times over through lower premiums and fewer disruptions from injuries. Workers' comp isn't just a legal checkbox—it's protection for your business, your employees, and your ability to grow.
