If you run a property management company, you're juggling a lot—tenant complaints, maintenance requests, lease agreements, and about a thousand other things. Workers' compensation insurance probably isn't at the top of your mind. But here's the thing: if you have employees, you almost certainly need it. And if you don't have the right coverage, one workplace injury could cost you thousands of dollars and potentially derail your entire business.
The good news? Workers' comp for property management doesn't have to be complicated or expensive. Understanding how class codes work, what drives your costs, and how to keep your premiums low can save you serious money while protecting your team. Let's break it down.
Do Property Management Companies Need Workers' Comp?
In most states, the answer is yes. As soon as you hire your first employee—whether that's a leasing agent, maintenance technician, or office administrator—you're required to carry workers' compensation insurance. This isn't just a good idea; it's the law in nearly every state.
But the specifics vary. California requires coverage for every employee, including part-time and temporary workers. Florida requires it once you have four or more employees for general businesses. New Jersey mandates it with just one employee. And then there's Texas, where workers' comp is actually optional for most private employers—though if you work on government contracts, you'll need it.
What about independent contractors? Legally, you don't need to cover 1099 workers. But here's the catch: if your contractor gets hurt on the job and doesn't have their own coverage, they could sue you directly. Many property management companies require proof of insurance from contractors or include them in their own policy to avoid this risk.
Understanding Class Codes: Why They Matter
Your workers' comp premium is based on class codes—numerical codes assigned by the National Council on Compensation Insurance (NCCI) that reflect the injury risk for different types of work. Property management businesses typically use two main codes:
Class Code 9012 covers clerical employees like leasing agents, office staff, and salespeople. The 2025 national average rate is $0.77 per $100 of payroll. These are your desk workers who aren't climbing ladders or fixing plumbing—lower risk, lower cost.
Class Code 9015 covers maintenance workers and property managers who handle repairs, cleaning, and general upkeep. The 2025 national average rate is $2.48 per $100 of payroll. This code reflects the higher injury risk of hands-on maintenance work—think slip-and-falls, tool injuries, and lifting accidents.
Here's where it gets tricky: code 9015 is one of the most commonly misclassified codes in the NCCI system. Businesses often incorrectly lump all employees under 9015 when some should be under 9012. The result? You could be paying three times more than you should for employees who spend their days behind a desk. Make sure your insurance provider classifies your staff correctly based on their actual job duties.
What Drives Your Workers' Comp Costs?
Your premium isn't just based on class codes. Three major factors determine what you pay:
Payroll is the foundation. Workers' comp premiums are calculated per $100 of payroll, so if you have higher payroll, you'll pay more in premiums. A maintenance worker earning $50,000 annually at the $2.48 rate would cost about $1,240 per year in workers' comp. A leasing agent earning the same at the $0.77 rate would cost just $385.
Your experience modification rate (EMR or ex-mod) is arguably the most important factor. This is a multiplier that reflects your company's claims history compared to industry averages. A score of 1.0 means you're average. Below 1.0 means you have fewer or less severe claims than similar businesses, so you get a discount. Above 1.0 means you have more claims, so you pay a penalty. Your 2025 ex-mod is calculated using data from 2021, 2022, and 2023.
Claims history impacts everything. Every workers' comp claim you file increases your ex-mod, which in turn raises your premiums for the next three years. Frequent claims signal to insurers that your workplace is riskier than average. On the flip side, a clean safety record keeps your ex-mod low and your premiums affordable.
How to Lower Your Workers' Comp Costs
The best way to reduce your workers' comp premium is to prevent injuries in the first place. Implement a workplace safety program—even a basic one—and tell your insurance provider. Many insurers offer discounts of 10-30% for businesses with documented safety programs. This could include regular safety training, proper equipment protocols, and hazard checklists for maintenance workers.
Return-to-work programs are another powerful tool. The longer an injured employee is out of work, the more expensive the claim becomes. If you can bring employees back to light-duty work while they recover—even if it's just answering phones or filing paperwork—you'll reduce claim costs significantly. Shorter claim durations mean lower ex-mods down the road.
Double-check your class codes every year during renewal. As your business grows and job roles evolve, make sure employees are still classified correctly. If you hired a maintenance worker who now spends 80% of their time in the office coordinating repairs rather than doing them, they might qualify for the lower 9012 rate. It's worth a conversation with your insurance agent.
Finally, shop around. Workers' comp rates vary between insurers, even for the same class codes and payroll. Get quotes from multiple carriers to make sure you're getting competitive pricing. Just don't sacrifice coverage quality for a slightly lower premium—you want an insurer who will actually support you when claims happen.
What Does Workers' Comp Actually Cover?
When an employee gets injured on the job, workers' compensation pays for medical expenses, lost wages, and rehabilitation costs. It also provides disability benefits if the injury prevents them from working long-term. In exchange, employees generally can't sue you for workplace injuries—this is called the "exclusive remedy" rule.
For property management companies, common claims include slips and falls during property inspections, back injuries from lifting heavy equipment, repetitive strain injuries from office work, and injuries from maintenance tasks like electrical work or plumbing repairs. Even seemingly low-risk environments can generate claims—a leasing agent who trips over a carpet in the office lobby is still covered.
Getting Started with Workers' Comp for Property Management
If you're just starting out or looking to switch carriers, the process is straightforward. You'll need your business information, estimated annual payroll by employee type, and details about your operations. Your insurance agent will assign class codes, calculate your premium based on payroll and ex-mod, and provide a quote.
For property management companies, expect to pay around $120 per month per maintenance worker and $25 per month per leasing agent based on 2025 averages. These are ballpark figures—your actual costs will depend on your state, payroll, and claims history. But having workers' comp isn't just about compliance. It's about protecting your employees when they get hurt and protecting your business from financial catastrophe. One serious injury without coverage could cost tens of thousands of dollars out of pocket, not to mention potential legal liability and state penalties.
Don't wait until you have an injury to get coverage. Talk to an insurance agent who specializes in commercial coverage, get your class codes right, and build a safety culture from day one. Your employees—and your bottom line—will thank you.
