In the first quarter of every year many businesses are renewing their commercial insurance policies. In most states General Liability and Workers’ Compensation Insurance are required by law. General Liability covers injuries that occur on your property, to customers and other third parties. Workers’ Compensation covers injuries that happen to your employees. Workers Comp provides medical costs and some lost wages while your employee is not able to work. Most businesses need additional coverages like Commercial Auto, Professional Liability, Liquor Liability and even Cyber Liability; but Workers’ Compensation and General Liability are the bare minimum to be in business. Workers’ Compensation is the one coverage where businesses can save quite a bit of money by taking just a few small steps. Here are five fairly simple steps Small Business Owners can take to save on Work Comp Insurance.
Have a well-documented safety program
Having a well-documented safety programs is crucial for two reasons. First it prevents workplace injuries from occurring. The safety of your workers should always be at the heart of any successful business. Also a safety plan can make it easier for your agent to defend your business operations when you have an insurance claim. These programs do not have to be extensive or take much time. Extensive training during the hiring process and weekly or monthly huddles are all it takes to show you are taking the proper steps to prevent injuries. If you have employees driving as a part of their job their driving record needs to be pulled yearly. Having a return to work program can also help get your injured workers back to work quicker and prevent claims from getting out of hand. Having one or all of these safety programs in place can help you get a discount on your policy up front and prevent your business from being dropped by a carrier when you have an accident.
Have a thorough website.
A website is important for than just marketing. Some insurance carriers require a website for coverage. The most important part of your website for insurance carriers is that it supports what you claim your business does on a daily basis. Your agent is going to ask detailed questions about your daily operations and investigate them. If you have a good website that reinforces what you tell them, they are going to more confidently defend your business to the insurance carrier.
Make sure you are in the proper NCCI Classification Code.
The best way to make sure you are classified properly is to be open and honest with your agent. The more information you give them the better. Many industries have more than one classification code. If your agent assumes you are in a riskier class code it can cost your business hundreds if not thousands of dollars. For example, if you own a landscaping company there are two main class codes (9102 & 0042). 9102 is for businesses that maintain already existing lawns and garden beds. 0042 is for businesses that design and install lawns and beds. This is a more dangerous undertaking and costs more in premium.
Ask for approved credits and discounts.
Each state and each carrier offer their own special discounts and credits. Your agent has to assume what is your priority as a business owner very quickly within their interaction with you. If your initial conversation is rushing them through the process, they might assume your time is more important than the price you pay in premium. If you make it clear to them that price is high on your priority-list, they will know to advocate on your behalf to get the lowest price possible for your business.
Selectively price shop.
It is important to shop our policy to many carriers, but switching carriers every year based solely on price is not advised. This is especially important when you have to file a claim. If you are in a fairly risky industry and your business has a claim, you are much more likely to be dropped by your carrier if it is your first year with that company. If you are dropped from your carrier and cannot find another carrier to pick you up than you are forced to purchase coverage from the state provider. Policies offered by the state provider are much more expensive. This can be a case of you trying to save $50-$200 on your policy, but if you are forced to go in to the state fund you may be paying as much as $500 more per year in premium. Once you are in the state fund typically you have to stay in the state fund for three years.
Mitchell Sharp is a Marketing Associate for Workers Compensation Shop.com. He has extensive knowledge of all forms of commercial insurance with particular expertise in workers’ compensation. Workers Compensation Shop.com is a commercial insurance agency that has been in business since 2005 and has helped more than 35,000 employers buy more affordable workers’ compensation coverage. Follow him @WorkCompShop