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If the law says you need workers' comp insurance--and inmost states, it does if you have three or more employees--you maythink you're stuck with the premium you're quoted. Not so.Some creativity and attention to detail can mean plenty of savings.Jim Royles, director of workers' compensation productmanagement at insurance and financial services company TheHartford, offers these tips:
$ Classify employeescorrectly. Your policy shows classifications, jobdescriptions and estimated payroll. Review it for accuracy, andcontact your agent or carrier with questions.
$ Consider a deductible.Typically, workers' comp covers from first dollar, but Roylessays about 75 percent of states allow deductibles, which earn youpremium credits. Consider your claims history and the amount of thecredit when making your decision.
$ Drop your own coverage.Many states let owners or corporate officers take themselves out ofthe workers' comp policy. That could lower costs, but wouldalso mean you wouldn't be covered for an on-the-job injury.
$ Ask about merit ratingcredits. In many states, smaller businesses thattypically pay $5,000 in premiums or less may be entitled to acredit of 5 to 15 percent if they have not had any lost-time claimsduring a period designated by the carrier.
$ Start safety and drug-free workplaceprograms. These programs may qualify for premiumcredits.
$ Keep accurate payrollrecords. Insurance carriers deduct "excludablecompensation" (such as the difference between base andovertime pay, tips and some other forms of compensation) from yourpayroll to determine your premium, so keep detailed records.
$ Shop around. Royles saysthere was a time when all carriers charged the same rates, butthose days are gone.
Jacquelyn Lynn is a freelance business writer in Orlando,Florida.
Contact Source
- The Hartford
(860) 547-3775, www.thehartford.com
