Anyone who runs a business knows that there are some costs that you can’t cut, and insurance is one of them. Worker’s comp insurance is absolutely crucial for a number of reasons. First, it’s a legal requirement in almost every state if you have more than one employee. Second, it protects you and your employees in case of an accident or injury. And third, a good workers’ comp scheme is going to make your business attractive to the best talent out there.
But it makes a lot of sense to want to know that you’re paying the right amount for your worker’s comp policies. The Hartford’s study shows that the average annual cost for worker’s comp insurance is $840, which translates to $70 a month. But there are a lot of different factors that go into the cost of an individual policy. You might be familiar with the basic formula “Workers’ Class Code Rate X Claims Experience Modifier X (Payroll / $100) = Premium”, but it can be a bit more complicated than that.
What Are The Factors That Go Into The Cost?
Every insurance policy is likely to be more or less expensive depending on how many claims you’ve submitted in the past, and that’s true here as well. You’re also going to be paying a higher premium the more employees you have. One of the most important factors is the type of work that your employees do. You’ll be paying less if they are sitting behind a desk all day, or if they’re working at home. You’ll be looking at more if they’re on a construction site wielding massive power tools.
What Does The Location Of The Business Have To Do With It?
The laws about worker’s comp insurance vary from state to state. For example, in North Dakota, Washington, Wyoming and Ohio, you can’t get coverage from a private supplier. Some states offer exemptions for certain industries, while Alabama only legally requires businesses to have worker’s comp if they have five employees or more.
How Can I Get The Best Price?
There are a few different ways that you can make sure that you are keeping the cost of your worker’s comp premiums as low as possible. As The Hartford points out, one of the best things that you can do is to make sure that everyone working for you is well-trained on the equipment they’re using. A safe workplace means that there are a lot fewer opportunities for injuries, which will mean fewer claims. You should also do whatever it takes to boost the safety standards at work. The time and effort spent on that will be worth it.
However, the best way to get the best price is to talk to a trustworthy insurance provider. They’ll tell you whether it’s worth raising your deductible, or whether you can bundle your worker’s comp policy in with the rest of your business insurance. An experienced provider will make sure that you’re paying the right price.