How Business Owners Can Keep Worker’s Compensation Insurance Affordable –
With the recent hits to the economy, changes in law, and other sorts of changes in the workplace, costs of maintaining workers compensation insurance for companies, and in particular for small businesses, are rising unpredictably. Some of this can be caused by your state’s assigned risk pool, some by the increase of high-risk situations, and some by other factors. However, there are things that you as a business owner can do to help reduce the rates of workers compensation insurance for your company.
1. Preventative Measures
First, there are some preventative measures you can take in the area of safety that may help to reduce workers comp insurance rates in the future. Whether you’ve had problems with worker safety in the past or not, being safe certainly doesn’t hurt. Depending on your line of work, you may want to look into safety precautions at workstations, or even establish a group to keep an eye on workplace safety within your organization. The more you can reduce the risk of accidents, the better you’ll make out in the long run.
2. Experience Rating
You’ll also want to check out your experience rating or experience modifier. This compares your claims history to that of other organizations in your industry. You can check out your rating by looking at worksheets from the National Council on Compensation Insurance (NCCI). Make sure that your rating is accurate, as your rating could save you as much as 45% on your Compensation Insurance.
Establish a good relationship with a healthcare provider. Sometimes you can use managed medical care to treat your workers. The more quickly you can get injured workers back to work, the better it is for your organization, and the better your rates are likely to be.
4. Payroll Audit
Sometimes your workers compensation premiums are based on your regular payroll figures. Often, you can deduct overtime for the purpose of figuring your payroll, and this in turn can help your rates. Performing regular audits of your payroll can save you a lot of money.
Use a deductible if you can. At this time, more than 30 states allow employers to lower their workers compensation insurance rates by implementing a deductible. Your state insurance offer or insurance broker should be able to tell you what the laws in your state allow. Normally this figure will be somewhere between $500 and $5,000.
Make sure that your company is correctly classified. If you are misclassified as a hazardous environment, your rates will probably skyrocket. If you misclassify even one of your workers, that can increase the insurance premiums drastically. You can call your state’s Workers Compensation Rating Bureau to find out how you’re currently classified and make sure that it is correct.
7. Shop Around
The last thing you’ll want to do is shop around. Your current insurance broker may not offer you the best deal available. Check with other brokers to find out what sorts of rates they will offer you, and determine what the absolute best deal for your situation is.
The bottom line is that if you’re aware, do your research, and act within established safety guidelines, it can be very easy to keep your rates down. The more proactive you can keep your safety programs, the lower your chance of risk is, and the better your chance of reduced payment is. Know the law and abide by it.
About the Author:
This article was written by Karl Stockton for the team at insuranceswami.com; learn how to bundle your insurance policies.
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