Companies hoping to protect their businesses and employees must choose the right workers’ compensation insurance plan. By assessing their business needs with a thorough evaluation of their company's size, industry, and the nature of their employees' work, they can get a head start determining the coverage level necessary to protect their business fully.
Here are the following steps:
Understand Your Coverage Options
Not all workers' compensation plans offer the same coverage. When evaluating plans, look for these essential coverage elements:
- Medical Expenses: Covers costs for emergency room visits, surgeries, and prescriptions related to work injuries
- Disability Benefits: Provides financial support for employees who become temporarily or permanently disabled due to work-related incidents
- Vocational Rehabilitation: Offers training and support to help injured workers return to work or find new employment if they can't return to their previous role
- Funeral Costs: In case of work-related fatalities, the plan should cover funeral expenses
Do a Cost vs. Benefit Analysis
When evaluating the costs and benefits of workers' compensation insurance, consider several factors:
Cost Factors
- Industry and Risk Level: High-risk industries like construction and manufacturing face higher premiums.
- Payroll Size: Premiums are calculated based on payroll, with larger payrolls generally resulting in higher overall premiums.
- Claims History and Experience Modification Rate (EMR): A history of frequent or excessive claims typically leads to higher premiums.
- Geographic Location: Costs vary by state due to regulations and cost of living differences.
- Employee Classification: Employees are assigned classification codes based on job duties, which affect premium rates.
Benefits
- Employee Protection: Covers medical expenses, rehabilitation costs, and lost wages for work-related injuries or illnesses.
- Legal Compliance: Meets state requirements for business operation.
- Financial Security: Protects businesses from potentially costly lawsuits and medical expenses.
- Employee Retention: Demonstrates commitment to employee well-being, improving morale and retention.
Cost-Saving Strategies
- Accurate Classification: Ensure employees are correctly classified to avoid overpaying.
- Safety Programs: Implement workplace safety initiatives to reduce accidents and potentially lower premiums.
- Regular Policy Reviews: Conduct periodic reviews to ensure coverage reflects current business operations.
- Compare Quotes: Obtain quotes from multiple providers to find the best rates.
- Consider Deductibles: Higher deductibles may lower premiums, but make sure you can afford out-of-pocket costs if a claim occurs.
By carefully weighing these costs and benefits, businesses can make informed decisions about their workers' compensation insurance while ensuring adequate coverage.
Confirm the Provider’s Reputation and Reliability
When choosing an insurance provider, look for companies with positive customer reviews and check their financial stability ratings (e.g., AM Best ratings). Consider the provider's experience in your industry.
Since a smooth claims process is crucial, evaluate the provider's claims handling procedures. Look at their customer service quality and responsiveness and the availability of risk management and safety resources.
We Can Help Your Company with Workers’ Comp Insurance
Looking for an experienced and reliable workers’ compensation insurance agency? Contact American Insuring Group online, or call (800) 947-1270 or (610) 775-3848. Our independent agents will find you the perfect policy at an excellent price. Contact us today to get started!
