Ways To Save On Workers Compensation Insurance
Workers compensation insurance rates are set according to employees' salaries and vocations, but there are ways that businesses can qualify for premium reductions. Use these strategies, and your business might be able to reduce how much it pays for workers compensation.
Confirm Correct Employee Classifications
Workers compensation policies code employees by the work they do, using a standardized system. Each classification code has a corresponding factor that represents the risk of injury for a field. Codes for higher-risk fields result in higher premiums, and lower-risk fields have codes that reduce premiums.
You don't have the option of reclassifying employees, for the system is standardized across workers compensation policies. You can, however, make sure that all of your employees are correctly classified.
Occasionally, a misclassification based on provided information can result in higher premiums. Correcting such a mistake could result in a slight premium reduction.
Provide Non-Monetary Compensation
In the event of a covered injury, workers compensation pays a portion of the employees' missed salary. The higher the salary, the more a claim costs the insurance company. Thus, increases in salary are assessed higher premiums.
Rather than providing salary increases, develop creative ways to increase employee compensation. You might be able to offer:
- Stock options that vest over years
- Additional paid time off
- Foods or beverages (if a restaurant)
- Product discounts (if a retailer)
- Discounts at partnering area businesses
Tactics such as these add value for employees' work, without actually increasing pay in a way that'll raise workers compensation premiums.
Develop Safety Protocols
Your business's workers compensation claim history will impact the rates that it pays, for one accident is presumed to indicate an increased risk of another. Thus, you can keep your workers compensation rates lower if your business can avoid injuries that lead to claims.
Developing safety protocols can help lower the occurrence of accidents in the workplace. Standard procedures that mitigate risk can prevent injuries if they're continually followed by employees.
Compare Workers Compensation Quotes
Like most purchased products, workers compensation policies vary in price -- and shopping around can ensure your business gets the lowest rates for the coverage it needs.
The easiest way to compare workers compensation insurance quotes is by shopping around with an independent insurance agent. Independent agents aren't obligated to any one insurer, so they can get you quotes from several companies. They also have the expertise necessary to help you compare both coverages and premiums.
