Workers’ Compensation Requirements for Auto Repair Businesses
- Nate Jones, CPCU, ARM, CLCS, AU
- 2 days ago
- 2 min read
For auto repair shop owners, Workers’ Compensation Insurance is essential. From lifting engines to using power tools and handling chemicals, technicians work in high‑risk environments where injuries can happen. Knowing who needs workers’ comp, how premiums are calculated, and what insurers look for helps you control the insurance cost for an auto repair business while staying compliant.
Who Needs Workers’ Compensation?
Most states require Workers’ Compensation if you have employees, even part‑time techs or service writers. Some states allow officer exemptions, while others mandate coverage regardless of role. If you use 1099 mechanics who work primarily for your shop or follow your direction, insurers may still treat them like employees for comp purposes.
How Premiums Are Calculated
Your premium is typically based on:
Class codes & rates: Auto repair techs are usually assigned to a mechanic/garage class code with higher risk than clerical.
Annual payroll: The higher the payroll in each class code, the higher the premium.
Experience Mod (X‑Mod/EMR): Compares your claims to similar shops; strong safety lowers your mod and your costs.
Claims history & safety programs: Frequent claims or poor controls raise premiums.
Coverage Must-Haves for Auto Shops
Medical & wage benefits for injured employees
Employer’s liability for certain lawsuits not covered by comp
Return‑to‑work (RTW) program to shorten disability duration
Modified duty guidelines for techs recovering from injuries
Risk Controls That Lower Your Costs
OSHA‑aligned safety program: lockout/tag-out, PPE, eye‑wash, spill kits, jack stands, lift inspections
Tool & equipment maintenance logs
Chemical safety (SDS) and ventilation
Driver safety for road testing
Weekly safety huddles and documented training
Post‑injury RTW plan to reduce lost‑time claims
What Carriers Ask For During a Quote
Have these ready to speed up your auto service business insurance quote:
3–5 years of loss runs (claims history)
Payroll by class code and job duties
Employee count (FT/PT, seasonal)
Safety manual/RTW policy (if available)
Services performed (engine, transmission, welding, diagnostics) and any subcontractor details
Get Workers’ Comp with a Shop-Focused Agency
Not every insurer writes auto repair risks, and pricing varies widely. Wexford Insurance works with carriers that specialise in auto shops nationwide, helping you meet state requirements, structure class codes correctly, and reduce premiums through practical safety improvements.
👉 Request your auto service business insurance quote from Wexford Insurance and keep your team protected while staying compliant and cost‑efficient.
