No, Your New York Workers’ Comp Premium Is Not Dropping 22%
No, Your New York Workers' Comp Premium Is Not Dropping 22%
On July 15 the Governor's office announced a 22 percent reduction in workers' compensation premium rates. What the Department of Financial Services actually approved was a 21.9 percent reduction in loss costs. Those are not the same thing, and the difference is where your real number lives.
The New York Department of Financial Services approved a 21.9% reduction in workers' compensation loss costs on July 15, 2026, effective October 1, 2026. A loss cost is not a premium. Your premium is the loss cost multiplied by your carrier's loss cost multiplier, your payroll, and your experience modification factor — and October 1 changes only the first of those. The 21.9% is also a statewide average across all classification codes, so your specific classes may move more or less. Most employers will see a real reduction; almost none will see exactly 22%.
What was actually approved
On May 7, 2026 the New York Compensation Insurance Rating Board's Board of Governors voted to file for a decrease of 21.9% in the overall loss cost level in New York State. The Department of Financial Services reviewed the filing and approved it on July 15, 2026, with an effective date of October 1, 2026.
It is a genuinely significant filing. It is the tenth consecutive annual decrease, it follows a 13.2% reduction that took effect in 2025, and approved decreases have averaged about 10.3% annually over the six years since 2020. The state attributes it primarily to a sustained decline in the frequency of lost-time claims. Alongside it, the employer assessment rate has fallen 37.5% since 2021, and the New York State Insurance Fund distributed more than $700 million to policyholders over the past year through dividends and discount programs.
| What | Figure | Source |
|---|---|---|
| Change in overall loss cost level | −21.9% | NYCIRB Board of Governors filing |
| Date approved | July 15, 2026 | NY Department of Financial Services |
| Effective date | October 1, 2026 | NY Department of Financial Services |
| Prior year change | −13.2% (2025) | NYCIRB |
| Consecutive annual decreases | 10th year | NYCIRB |
| Average annual decrease since 2020 | about 10.3% | NY DFS |
| Employer assessment rate change | −37.5% since 2021 | NY DFS |
The Governor's announcement framed this as employers seeing "on average, a 22 percent reduction in workers' compensation insurance premium rates," an estimated savings of more than $1 billion, or an average of $1,779 per policyholder.
That framing is where the confusion starts.
Loss costs are not premium rates
This distinction is not pedantry. It is the difference between what you read and what you pay.
A loss cost is NYCIRB's actuarial estimate of what it costs to pay and adjust claims for a given classification code, expressed per $100 of payroll. It contains no insurer overhead, no commission, no taxes and no profit margin. It is a pure loss number.
To convert a loss cost into a usable rate, every carrier applies its own loss cost multiplier. The LCM loads in everything the loss cost leaves out. Each carrier files its LCM with DFS, DFS approves them individually, and they differ meaningfully from carrier to carrier. NYCIRB's filing changed the loss cost. It did not change a single carrier's LCM.
Then the rate has to become your premium, which brings in your payroll, your classification mix, your experience modification factor, and any schedule credits or debits your carrier applies.
| Component | Changes on Oct 1? | Who controls it |
|---|---|---|
| Loss cost by class code | Yes — this is the filing | NYCIRB, approved by DFS |
| Loss cost multiplier (LCM) | No | Your carrier, filed separately with DFS |
| Experience modification factor | No | Your own loss history |
| Payroll and class assignment | No | You, and audit accuracy |
| Schedule credits and debits | No | Underwriter discretion |
| Assessments and surcharges | Separate schedule | Workers' Compensation Board |
Read that table again with your own program in mind. One line moved. Five did not.
Why your number will not be 21.9%
There are four reasons, and most accounts are affected by at least two of them.
1. It is an aggregate average, not a uniform cut
The 21.9% figure describes the overall loss cost level across the entire New York system. Individual classification codes are re-rated on their own emerging loss experience. Some classes will decrease by more than 21.9%. Some will decrease by less. Some classifications can increase even in a year when the aggregate falls sharply. If you carry four or five construction class codes, your blended result is a function of your specific payroll distribution across those codes — which is a number only your own policy can produce.
2. Your carrier's LCM did not move
If your carrier's multiplier stays where it is, the reduction in the underlying loss cost passes through to your rate, but it passes through against an unchanged expense and profit load. The rate reduction is real. It is not automatically equal to the loss cost reduction.
3. Your experience mod is unchanged
Your mod is calculated from your own payroll and loss history on its own cycle, and this filing does not touch it. If your mod is 1.35, it will keep applying to whatever the new rate turns out to be. This is worth sitting with for a moment: for a contractor with a poor mod, the mod is a far bigger lever than the filing. Moving from 1.30 to 0.95 over three or four years of disciplined claims management is worth more than a one-time loss cost reduction, and unlike the filing, it is entirely yours to control.
4. The date it applies to is your renewal, not October 1
This is the one that costs people money quietly.
The new loss costs apply to policies written or renewed on or after October 1, 2026. A policy that incepts on September 15 is rated on the old loss costs and carries them for the full twelve-month term. You would not see the reduction until your September 2027 renewal.
If your renewal falls in the weeks before October 1, this is worth a deliberate conversation. Ask your broker whether a short-term policy to bridge to October 1 is available from your carrier and whether the arithmetic still works after any short-rate or minimum-premium considerations. Sometimes it does. Sometimes it plainly does not. The point is that it should be a decision you made rather than a consequence you discovered in October.
| Contractor A | Contractor B | |
|---|---|---|
| Loss cost change on their classes | −21.9% | −21.9% |
| Carrier's loss cost multiplier | Unchanged | Unchanged |
| Experience modification factor | 0.92 | 1.35 |
| Renewal date | November 1, 2026 | September 15, 2026 |
| When they see the reduction | At their November renewal | Not until September 2027 |
| Practical result this year | Meaningful reduction | No change for twelve months |
Illustrative only. Actual outcomes depend on class code mix, carrier, schedule credits and assessments.
What this means specifically for contractors
If you build in New York, there are two things to hold in your head at the same time, and they point in opposite directions.
Your workers' compensation cost is genuinely coming down. Comp is one of the largest line items on a labor-intensive contractor's insurance program, and a decade of consecutive decreases is real relief.
Your liability exposure has not moved at all. Labor Law § 240(1) is exactly as absolute on October 2 as it was on September 30. Owners and general contractors still face liability for gravity-related injuries with no comparative negligence defense. Excess capacity for New York construction is still constrained, and contract limit requirements are still climbing.
And there is a specific trap in the combination.
Cheaper comp does not reduce Action Over exposure. Workers' Compensation Law § 11 still permits an owner or general contractor to bring a third-party action over against you when your subcontract contains an indemnity clause. That claim is paid by your general liability and excess tower, not by your comp policy. A contractor who reads "22% savings," relaxes, and declines to build out the excess layer has traded a real reduction on one line for an unquantified exposure on another.
The honest summary for a New York contractor: your total cost of risk may not fall at all this year. What is happening is that the comp line is subsidizing increases on the liability side. Whether you come out ahead depends on your program as a whole, not on any single filing.
What to do between now and October 1
Five things, in the order we would do them.
Find your renewal date. Not approximately — look at the declarations page. If it falls between now and October 1, everything else on this list is more urgent.
Pull your payroll by class code. The blended effect of the filing on your program depends entirely on your distribution across codes. Without that breakdown, nobody can model it, including us.
Get your experience mod worksheet. Not just the factor — the worksheet, which shows which claims are driving it. Claims that will age out of the calculation are the ones to plan around.
Audit your class assignments. Misclassified payroll is one of the more common and more expensive errors in construction comp, and a re-rating year is a natural moment to check it. Sometimes the correction is worth more than the filing.
Look at the liability side in the same conversation. If comp is coming down and excess is going up, you want to see both numbers together before you decide what your program should look like next year.
The short version
The filing is real, it is large, and it is good news for New York employers. It is the tenth consecutive decrease and it reflects a genuine long-term improvement in claim frequency across the state.
It is also not a 22% cut to your bill. It is a 21.9% reduction in one of five inputs to your premium, applied as a statewide average across hundreds of classification codes, effective on policies incepting on or after October 1. Your actual result depends on your class mix, your carrier, your mod and your renewal date — and for most contractors it will be a real but smaller reduction than the headline suggests.
If you want to know what it does to your specific program rather than to the statewide average, that is a calculation, not a headline. We are happy to run it.
Want to know what your number actually does?
Send us your current declarations page, your payroll by class code and your experience mod worksheet. We will model what October 1 does to your specific program — and tell you if your renewal date is working against you.
Model my renewal → WhatsApp →Frequently Asked Questions
Is New York workers' comp really going down 21.9% on October 1, 2026?
The loss cost level is. On July 15, 2026 the New York State Department of Financial Services approved the New York Compensation Insurance Rating Board's filing for a 21.9 percent reduction in the overall loss cost level, effective October 1, 2026. That is real and it is large — it is the tenth consecutive annual decrease and it follows a 13.2 percent reduction in 2025. But a loss cost is not a premium. It is one input into a premium, and the other inputs are not changing on October 1.
What is the difference between a loss cost and a rate?
A loss cost is NYCIRB's estimate of what it costs to pay claims and adjust them, expressed per $100 of payroll for each classification code. It contains no insurer expenses and no profit. To turn a loss cost into a rate, each carrier applies its own loss cost multiplier (LCM), which loads in overhead, commission, taxes and profit. Every carrier files its own LCM and DFS approves them individually. NYCIRB's filing changed the loss cost. It did not change anybody's LCM.
So how much will my premium actually change?
Nobody can tell you from the 21.9 percent figure alone, and any broker who quotes you a number off that headline is guessing. Your premium is your class code loss cost × your carrier's LCM × your payroll ÷ 100 × your experience modification factor, plus schedule credits or debits and assessments. October 1 moves the first term only. If your mod is 1.35 and your carrier's LCM is unchanged, your net change will be materially less than 21.9 percent. Some accounts will see close to the full reduction. Some will see very little.
Is 21.9% the same for every class code?
No, and this is the part that catches contractors. The 21.9 percent is an aggregate statewide average across every classification in the system. Individual class codes are re-rated on their own loss experience, so some will decrease more than 21.9 percent, some less, and some classifications can increase even in a year when the overall level falls. If you carry several construction class codes, your blended change is whatever your specific payroll mix produces — not the headline.
My policy renews September 15. Does that matter?
Yes, and it is the single most actionable thing on this page. The new loss costs apply to policies written or renewed on or after October 1, 2026. A policy incepting September 15 is rated on the old loss costs and carries them for a full twelve months, which means you would not see the reduction until September 2027. It is worth asking your broker whether a short-term policy to bridge to October 1 is available and whether the math works after fees. Not every carrier will write one, and it is not automatically the right call — but it should be a deliberate decision, not something you find out about afterward.
Does my experience modification factor change on October 1?
No. Your experience mod is calculated on its own schedule from your own loss and payroll history, and it is unaffected by the loss cost filing. If your mod is above 1.00 it will keep multiplying whatever the new rate is. For contractors this matters more than the filing does: over three or four years, moving a mod from 1.30 to 0.95 is worth considerably more than a one-time loss cost reduction, and it is the part you actually control.
If comp is going down, is my total cost of risk going down?
Not necessarily, and for New York contractors probably not. Workers' compensation is one line. Over the same period, construction general liability and excess in New York have been moving the other way, driven by Labor Law § 240(1) severity and constrained excess capacity. A contractor can see a genuine comp reduction in October and still write a larger check overall, because the excess tower absorbed the savings and more. Look at the whole program, not one line.
Does the comp decrease reduce my Action Over exposure?
No. It reduces the price of the coverage, not the exposure. Workers' Compensation Law § 11 still permits a third-party action over against you as the employer when a written subcontract contains an indemnity clause, and that claim lands on your general liability and excess tower, not on your comp policy. Cheaper comp and unchanged Labor Law exposure is exactly the combination that leads contractors to under-buy excess. Do not let the good news on one line disguise the other.
