For most businesses, employees are an essential element in the delivery of products and services to customers. Aside from overhead such as payroll and benefits, Workers Compensation is a necessary evil when it comes to employing people. Workers Compensation insurance is intended to be the sole solution for employee injuries, incurred during the course of employment.
Q: What factors impact Workers Compensation premiums for my business?
A: Your premiums are determined by (1) the insuring company or carrier, (2) the scope-of-work that is performed, (3) the previous Workers Compensation experience or claims history and (4) the employee safety programs.
Q: How can my business improve its Workers Compensation position?
A: There are two controllable factors, and you play an active role in affecting your costs. Carriers provide coverage for your industry at different rates, and you can choose your carrier. Implementation of Safety Programs reduces the likelihood of future claims. There are several
strategies that can be implemented to make your Workers Compensation risk more desirable, and reduced premiums are the result.
Q: What mistakes should I avoid?
A: Inaccurate projection of payrolls: Premium calculations are based on payroll information. Payroll estimates should be evaluated mid-term and at the beginning of each term. Misclassification: Premiums are also based on a rate associated with your classification of work. Policies should be reviewed to verify that employees are properly classified with regard to what they are doing. Operations in other states: It is critical that work in other states is communicated to your agent in order to avoid uninsured claims. Subcontracted work: If you are using subcontractors, collect proof of their insurance. You want to avoid being responsible for a subcontractor’s Workers Compensation costs. I95