Business insurance premiums are generally tax deductible because the IRS treats them as ordinary and necessary business expenses. General liability, commercial property, workers comp, commercial auto, professional liability, and cyber premiums all typically qualify. The notable exceptions: life insurance where the business is the beneficiary, and certain self-insurance reserves. Confirm specifics with your tax professional.

Brian Greenberg•Updated Jul 2026

Business Insurance

Is Workers Comp Taxable? IRS Rules for Benefits and Wages

Workers compensation benefits are generally not taxable at the federal or state level: IRS Publication 525 excludes amounts received under workers compensation acts for occupational injury or sickness. The main exception arises when benefits offset Social Security disability payments, making a portion effectively taxable. For employers, premiums are a deductible business expense.

Brian Greenberg•Updated Jul 2026