If you run a lawn care business, here's something that might surprise you: your workers' compensation insurance can cost nearly double depending on how your work gets classified. A crew doing basic mowing and trimming pays roughly half what a landscape installation team pays—even with the same payroll. That's because workers' comp isn't one-size-fits-all for lawn care businesses. The type of work you do, where you operate, and your safety track record all combine to determine what you'll actually pay. Let's break down what you need to know about workers' comp for lawn care, from requirements to class codes to the factors that drive your premium up or down.
When Do You Actually Need Workers' Comp?
In 49 states, if you have employees, you need workers' compensation insurance. Period. It doesn't matter if you're running a solo operation with one part-timer or managing a crew of twenty—the moment you hire someone, you're typically required to carry coverage. The only exception is if you're a true solo operator with no employees at all, though even then, some states require coverage for business owners.
Each state has its own specific threshold for when coverage kicks in. Some states require it with your first employee, while others set minimums like three or five employees. A few states operate monopolistic state funds where you must purchase coverage directly from the state rather than a private insurer. Your best bet is to check with your state's Department of Labor or talk to an insurance agent familiar with your local requirements. Getting this wrong isn't just expensive—it can shut down your business if you're caught operating without required coverage.
Class Codes: Why Your Type of Work Matters So Much
Here's where things get interesting. Workers' comp insurers use classification codes to determine your rate, and for lawn care businesses, the code you're assigned can nearly double your premium. The three main codes you'll encounter are:
Code 9102 (Lawn Care Services) applies to basic "mow and blow" operations—mowing, edging, trimming, and maintaining existing landscapes. This code carries lower risk and typically runs about $2.33 per $100 of payroll. If your crew just shows up, cuts grass, and leaves, this is probably your code.
Code 0042 (Landscape Gardening) covers comprehensive landscaping services like installing flower beds, planting trees, mulching, and limited hardscaping such as laying pavers. This is considered a construction code and runs around $4.39 per $100 of payroll—nearly double the lawn maintenance rate. The reasoning makes sense when you think about it: digging, lifting heavy materials, and operating more complex equipment carries higher injury risk.
Code 5221 (Flat Concrete/Cement Work) applies if you're installing patios, sidewalks, or driveways. This runs about $4.37 per $100 of payroll, similar to landscape installation work.
The tricky part comes when your employees do multiple types of work. If someone spends mornings mowing lawns and afternoons installing landscape beds, underwriters might apply the higher-risk Code 0042 to their entire payroll unless you clearly separate and document their time. This is one of the most commonly misclassified areas in lawn care workers' comp, and it can cost you thousands annually. Keep detailed time records showing what work each employee performed, and you'll avoid paying the higher rate for lower-risk work.
What Actually Determines Your Premium
Your workers' comp premium comes down to a simple formula: (Payroll ÷ 100) × Classification Rate × Experience Modification Rate = Your Premium. Let's break down each piece:
Your payroll is straightforward—it's the total wages you pay your employees. The classification rate we just discussed ranges from $2.33 to over $7.00 per $100 of payroll depending on your type of work. But the real wildcard is your experience modification rate, or E-Mod.
Think of your E-Mod as your safety report card. A rating of 1.0 means you're exactly average for your industry and size. Below 1.0 means you have fewer claims than expected, and you'll pay less. Above 1.0 means you've had more claims, and you'll pay more. If you run a tight ship with strong safety practices and few injuries over several years, you might see an E-Mod of 0.85, which reduces your premium by 15%. But if you've had multiple workers' comp claims, you might face an E-Mod of 1.3 or higher, adding 30% or more to your cost.
Your location also plays a huge role. Workers' comp rates vary dramatically by state. For basic lawn care (Code 9102), North Dakota charges about $1.45 per $100 of payroll while New Jersey runs $5.22—that's a 260% difference. If you operate in multiple states, you'll need coverage in each one, and your rates could vary wildly from one location to another.
Most lawn care businesses end up paying between $400 and $3,000 per year for workers' comp, with the average running around $2,029 annually or about $169 per month. That's a wide range, and where you fall depends on your payroll size, your class code, your state, and most importantly, your claims history.
How to Keep Your Costs Down
The single best way to control your workers' comp costs is to prevent injuries. That sounds obvious, but it's worth taking seriously. Implement safety protocols for equipment operation, require proper protective gear, train employees on safe lifting techniques, and maintain your equipment so it doesn't malfunction. Every avoided injury saves you money not just on the immediate claim, but on your future E-Mod rating.
Make sure you're correctly classified. If you're primarily doing lawn maintenance but getting charged the landscape installation rate, you're overpaying. Keep detailed records of what work your employees actually perform, and if you do offer multiple services, track time separately for each type of work. This documentation can be the difference between paying $2.33 versus $4.39 per $100 of payroll.
Shop around. Workers' comp rates for the same business can vary between insurers, especially if you have a clean claims record. Work with an independent agent who can compare quotes from multiple carriers. And if you've improved your safety record or gone several years without claims, ask your current insurer about reclassifying your risk level.
Getting Started with Coverage
If you're hiring your first employee or shopping for better rates, start by gathering some basic information: your expected annual payroll, a breakdown of what types of work your employees will perform, your business location(s), and any claims history from previous coverage. An insurance agent can use this to get you accurate quotes.
Don't skip this coverage to save money. Operating without required workers' comp can result in massive fines, lawsuits if an employee gets hurt, and potentially losing your business license. The cost of coverage is a normal cost of doing business with employees—budget for it, shop for the best rate, and focus on keeping your E-Mod low through solid safety practices. Your future self (and your bank account) will thank you.
