New Mexico Workers' Compensation Insurance

Your Guide to Workers' Comp Insurance in New Mexico

Find the right workers' comp insurance policy for you.

New Mexico Workers Compensation Insurance

In recent years, New Mexico has paid out $2.418 billion in workers' comp claims. Work-related injuries happen every day, from trips and falls to life-altering injuries, but having the right workers' comp coverage can help protect your business. For help navigating workers comp insurance coverage, find a local independent agent.

Workers' Compensation Coverages/Non-Coverages in New Mexico

Employees need help paying for medical bills when they get injured on the job. Workers’ compensation insurance is designed to protect employees from the costs of workplace injuries, and protect employers from lawsuits and other unpredictable costs.

Here's a closer look at what workers' compensation covers and does not cover in the state of New Mexico.

Workers' comp covers the following:

  • Traumatic injuries
  • Repetitive-type injuries
  • Certain mental injuries
  • Occupational diseases

Real-life example of coverage:

A barista at a New Mexico coffeehouse gets a severe burn from an overheated beverage. The employee gets taken to the hospital to be treated for their injuries. A workers' comp policy would help pay for any related medical treatments and other costs.

Workers' comp does not cover:

  • Employee illnesses or injuries sustained outside of work
  • Accidents that occur while an employee is intoxicated
  • Intentional employee injuries to themselves at the workplace
Workers' Compensation Coverage Covered Not Covered
Traumatic injuries
Covered by Worker's Compensation
Repetitive-type injuries
Covered by Worker's Compensation
Certain mental injuries
Covered by Worker's Compensation
Occupational diseases
Covered by Worker's Compensation
Employee illnesses or injuries sustained outside of work
Not covered by Worker's Compensation
Accidents that occur while an employee is intoxicated
Not covered by Worker's Compensation
Intentional employee injuries to themselves at the workplace
Not covered by Worker's Compensation

An independent insurance agent can further explain what workers' compensation insurance both covers and excludes in New Mexico.

Why Do You Need Workers Compensation Insurance in New Mexico?

Workers' comp insurance is a necessity for most businesses for several reasons. For starters, it's actually required by law in most states, if your business has employees. Workers' comp also provides critical protection for your business against financial losses.

For most states, workers' comp is required immediately upon hiring a new employee. You'll want to be equipped with coverage before any of your workers get injured or ill on the job so that your business won't be held financially liable. Coverage doesn't kick in for workplace incidents until after you purchase a policy.

What Consequences Could You Face if You Don’t Have Workers’ Compensation in New Mexico?

If your business doesn't carry workers' comp to protect your team, you could end up facing legal consequences like fines or jail time. Though some businesses think of workers' comp as optional or unnecessary due to the nature of their operations, coverage can provide important financial protection in case of an incident.

Workers' comp is mandatory in most states, including New Mexico, if your business has three or more employees, whether full or part-time. Businesses in New Mexico without the right workers' comp insurance can be subject to financial or criminal penalties and may even be shut down by the state for noncompliance. 

New Mexico Workers’ Compensation Laws

New Mexico passed its first workers’ compensation law in 1929. The Workers’ Compensation Act requires employers to purchase workers’ compensation insurance that provides benefits to injured workers regardless of fault. Injured workers cannot sue the employer for liability for their injuries. Employees receive medical care and wage replacement benefits, and the employer can predict costs based on their workers’ comp premiums. 

In 1986, the New Mexico Workers’ Compensation Administration (WCA) was created. The WCA handles workers’ comp administration, allowing for faster resolution of cases, quick and efficient delivery of benefits to injured workers, and reasonable costs for employers. 

How Much Does New Mexico Workers’ Compensation Insurance Cost? 

Workers’ comp costs more for high-hazard industries than for low-hazard industries. New Mexico workers’ comp premiums are determined by how many employees an employer has, the type of jobs performed, and the employer’s history of accidents and workers’ compensation losses. 

New Mexico partners with the National Council for Compensation Insurance (NCCI), an independent rating and data collection bureau, to assign workers’ comp rates for every industry. The NCCI assigns classification codes to each occupation, and each code is assigned a base rate for workers’ comp. To determine an employer’s  premium, the annual payroll at the start of the period is divided by 100 and then multiplied by the base rate. 

Consider the following example:

  • Classification Code 8380: Auto Shop
  • Base Rate: $2.19
  • Employer payroll: $100,000
  • Premium calculation: $2.19 per $100 of employer payroll (or 2.19% of payroll)
  • Estimated annual premium: $2,190.00 

Most employers will have employees in more than one class code. An auto shop owner might employ mechanics, cashiers and other types of workers. All of its applicable classifications and related premiums are combined to determine its annual New Mexico workers’ comp premium. 

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New Mexico Workers’ Compensation Recent Base Rate Examples

New Mexico workers’ compensation insurance premiums are higher than the national average and continue to increase. Insurance company premiums are filed with and approved by the New Mexico Workers’ Compensation Administration. The NCCI sets a low rate and a high rate for each New Mexico class code. Insurance companies can offer certain discounts and credits to eligible policies.

Here are some recent sample base rates (rate per $100 of employer payroll):

  • 0042 Landscaping: $5.81
  • 5183 Plumbing: $3.32
  • 5427 Carpentry: $6.00
  • 8017 Retail Store: $2.03
  • 8810 Clerical: $0.30
  • 9082 Restaurant: $1.36

Workers' Comp Cost Per Employee in New Mexico

The cost of workers' comp coverage per employee increases with higher company payrolls, as these businesses cost more to insure. Check out a breakdown of how workers' comp costs vary by payroll range in each specific industry below.

Annual Workers' Comp Cost Per Employee

Industry Lower Cost Medium Cost Upper Cost
Construction $1,549 $2,968 $11,357
Finance and Insurance $510 $921 $3,371
Hotels / Motels $374 $840 $3,550
Manufacturing and Food Production $662 $1,258 $4,784
Professional and Technical Services $479 $948 $3,707
Real Estate $86 $171 $672
Restaurants and Taverns $152 $339 $1,425
Retail Trade $292 $560 $2,145
Transportation and Warehousing $1,141 $2,247 $8,759

Businesses that have a greater track-record of safety and fewer accidents pay less for their coverage. Insurance companies have complex formulas to reset your rates after an accident, likely leading to a noticeable spike in your premiums.

Best Workers' Comp Companies in New Mexico

Workers' comp is available from many different insurance companies in New Mexico. Here are just a few of our top picks for quality workers' comp insurance carriers.

Top Workers' Compensation Insurance Companies Star Rating
Central Insurance Companies
5 star rating
Nationwide
5 star rating
Liberty Mutual
4.5/5 star rating
Builders & Tradesmen's Insurance
4.5/5 star rating
Travelers 
5 star rating

An independent insurance agent can help you look into these workers' comp insurance companies and get matched to the carrier who best meets your needs at the most affordable rate.

Top 6 Most Common Workers' Comp Claims/Injuries

Top 6 Most Common Workers Comp Claims
  1. Lacerations: In other words, deep cuts. These can happen in any industry, but are especially common in the restaurant and manufacturing fields. 
  2. Sprains/strains: Again, these injuries can happen in any industry, but are especially common in job settings where lots of twisting and turning is required.
  3. Contusions: In other words, bruises and other marks on the skin caused by impact. Contusions often happen from dropped objects, improper lifting, or colliding with an object.
  4. Burns: Burns can happen in any industry that has a heat source, including restaurants, construction businesses, bakeries, and more.
  5. Eye injuries: Eye injuries are most frequent in industries that require chemicals, including manufacturing, painting, and construction.
  6. Fractures: Fractures can happen to employees anywhere, but are especially common in industries that require a lot of movement and the use of heavy machinery.

Why Are Independent Insurance Agents Awesome?

It’s simple. Independent insurance agents simplify the process by shopping and comparing insurance quotes for you. Not only that, but they’ll also cut the jargon and clarify the fine print, so you know exactly what you’re getting.

There’s no business too small for our independent insurance agents. They have access to multiple insurance companies, ultimately finding you the best workers' comp coverage and competitive pricing while working for you.

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TrustedChoice.com Article | Reviewed by Paul Martin

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https://workerscomp.nm.gov/sites/default/files/documents/publications/empguide.pdf

https://www.employers.com/blog/2019/7-common-workers-compensation-claim-injuries/