3 Tips To Getting Better Workers Comp Insurance
As a business owner, it’s your responsibility to provide a safe work environment for your employees. However, accidents happen. If your employees get hurt or sick on the job, workers’ compensation benefits can help cover the following:
- Medical bills
- Disability payments
- Lost wages
- Funeral expenses
- Legal costs in the event that your employee or their family sues you
And while workers’ compensation rates vary from state to state, there are a handful of ways to ensure that you’re getting the best rate possible. Below are 3 tips to help you get a better workers’ comp rate:
1. Operate a Safe Business
While this tip might seem self-explanatory, it’s more important than you may think. Your experience modifier, better known as your MOD, stands to represent your company’s claim experiences. MODs are calculated by comparing your business to others in the same industry with similar employees. An average MOD is set at 1.00. Employers with fewer and less severe accidents have a MOD of less than 1.00 and a lowers workers’ comp rate to go with it.
Investing in the implementation and knowledge of safety procedures in your company plays an enormous role in securing the best workers’ compensation premiums. Working towards consistent policy reviews is an excellent way to improve your MOD by helping you stay focused on your business’ safety procedures and what you can do to avoid unnecessary claims.
2. Confirm Your Class Codes and Payroll Status
Businesses are separated into different groups based on the kind of work they do. This classification system calculates how much risk your employees are taking by performing certain tasks for work. For each classification of employee, the business owner must pay a certain amount for workers’ comp insurance based on every $100 dollars of payroll, which is why it’s important to ensure that you’re operating within the correct class.
The basis for an employer’s workers’ comp insurance premium is also calculated off of your payroll. For each $100 dollars of your payroll, there is a specific rate, which is determined by the classification codes of your employees.
You can opt to spread your premium payments out over the year instead of paying one lump sum. Just be sure to choose a payroll provider that gives you the option of having your workers’ comp premium deducted each payroll period in a pay-as-you-go program.
3. Choose the Right Agent and Insurance Carrier
If you’re serious about taking control of your workers’ compensation premiums, it’s important to work with an insurance agency that can help you do so. A deep understanding of the market, your business, and a commitment to finding the best rates possible is necessary for a good agent. Your insurance provider should always be open to answering your questions and providing assistance should a loss ever occur.