Regardless of the average cost of workers’ compensation insurance in your state, there’s always one thing on your mind: saving money. While there’s nothing wrong with looking into cost-cutting measures, you must always make sure your workers are protected in the event of an accident.
Fortunately, there are ways to save money on coverage without putting your company or employees at risk. Here’s what you need to know.
Workers’ compensation insurance premiums are based on factors such as:
Your premium is calculated using a “premium index rate.” This is the dollar amount that you’ll pay per $100 in payroll. For example, $2.50 to $2.99.
But how do you save?
Now that you know the factors that affect premiums, let’s turn our attention to the ways you can save. Here are five ideas to consider.
Just the same as any other type of insurance — such as home insurance or life insurance — shopping around the private market positions you to secure the best deal from a reputable provider.
For instance, in California, you can buy a policy from any licensed insurance company. If that doesn’t work, you also have the option of purchasing through the State Compensation Insurance Fund.
This is easier said than done, as you purchase workers’ compensation coverage to protect your employees. So, if someone is injured on the job, they have the legal right to file a claim. You can’t attempt to talk them out of filing a claim or take adverse action, such as terminating their employment.
Avoid claims by proactively implementing safety guidelines and requirements. This is even more important in high-risk industries such as roofing and construction.
A growing number of workers’ compensation insurance companies are offering “pay-as-you-go” policies. This allows you to pay based on the actual payroll for each period, as opposed to annually.
This option allows you to pay less upfront, while also avoiding overpayments. By paying upfront, you free up funds that can be used for other expenses.
Talk to your broker or agent about discounts. Workers’ compensation insurance carriers are aware that they have to outdo the competition. That leads most of them to offer discounts for things such as:
You’ll never know if your business qualifies for a discount until you ask. You may be surprised to find that you’ve been overpaying.
Inaccurate work comp classification codes will impact your premium. These codes vary based on the risk of injury. Think about it like this: the rate for a roofer is higher than the rate for an accountant.
Here are some tips to follow when reviewing classification codes:
Cost and coverage are the two most important details when buying workers’ compensation insurance. If you’re looking for ways to save, the five tips above serve as a solid foundation.
And of course, the professionals at WorkCompOne are available to show you the way. Get started by completing the quote form on our website.