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Control Your Costs

With so many other details of your business to focus on, workers' compensation insurance can be a hassle and an unwanted expense. But suffering a claim or getting fined for not having coverage could be far more devastating to your cash flow. Fortunately, you can factor the annual expense of a work comp policy into your budget, and there are steps you can take to lower your costs over time.
 
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Prevent Claims

  • Your claims history is used to gauge how safe your workplace is and how likely you are to have future claims. Any claim, big or small, will influence your premium. Conversely, months or years without a claim reflects a safe work environment and can lower your rates.
  • The most significant way to control your work comp costs is to prevent accidents from happening and to promote safety in your workplace.
  • Knowing your level of risk can help you better prevent workplace accidents. Learn more about the most common injuries in your industry and build employee training around those hazards. Post the required work comp posters and establish formal safety programs and first-aid procedures which, in addition to reducing the possibility of claims, can make you eligible for a safety credit.

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Revise Class Codes & Payroll Annually

  • Insurance carriers calculate work comp premiums, in part, by evaluating the kinds of work a business performs. 
  • As your business grows, it's important to revise the class codes and payroll on your policy.
  • Check at least annually to make sure your policy accurately reflects your business.


Don't Cut Corners

  • One of the most common mistakes made by small businesses is to cancel coverage when it's not needed (such as contractors when between jobs). But what saves money in the short-term may be more costly long-term: Insurance carriers review the past history of applicants and will deny coverage or charge higher premiums when they see inconsistent coverage.
  • Don't under-insure your business. Insuring your business for less than its true payroll can be a pricey mistake. Annual workers' compensation audits could result in an unexpected adjustment that cripples your cash flow, or you could suffer a claim and not have sufficient coverage. Make sure your policy is comprehensive - If you're going to have employees in multiple states, or employees traveling across state lines to work, make sure your policy covers these states as well.

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Get an Experience Mod

  • If you've been in business for three years or more, you may be assigned an experience mod. The rating bureau in your state rates your business based on its history of claims the past three years. The experience mod is baselined at 1.0.
  • Businesses with few or no claims during this timeframe will receive lower experience mods (less than 1.0). Insurance carriers are required by law to credit your premium based on the experience mod, resulting in big savings over time.