As an employer, you know that workers compensation insurance is a legal requirement in your state. However, you might not be aware of how much your current policy costs or what features it has. When signing up for a new policy or shopping for a cheaper alternative, there are many things to consider about workers’ compensation insurance. You want to find the best deal available while also ensuring you have adequate coverage to protect your business from the risks of injury from your employees. If you haven’t shopped for workers’ comp in a while, it will be helpful to learn about the best way to find deals on this type of insurance and which factors will impact the cost. To help you get started, here are 8 tips on how to save money on workers’ compensation insurance.
Ask for quotes from multiple providers
The first step in shopping for workers’ compensation insurance is to request quotes from multiple providers. You can use an online comparison tool to request quotes from a few different providers. You can also check your current policy or with your state’s department of insurance to see who provides workers’ comp insurance in your state. When requesting quotes, be sure to include information about your company’s workers, your payroll, and the industry you work in. Providers will want to know about how many employees you have, how much you pay each worker, and how many hours they work each week.
Review the benefits and risks of each provider
After receiving quotes from multiple providers, you can review the benefits and risks associated with each provider. Make sure the provider’s coverage is sufficient to protect your business from liability. Consider factors like the overall availability of coverage and the provider’s financial stability. You’ll also want to review the details of each policy’s exclusions. For example, an exclusion may state that the policy does not cover employees who work from home. Or, the provider might not cover certain types of injuries or work environments. You may also want to review any endorsements that apply to your policy. An endorsement is a special addition to the policy that provides extra coverage in certain situations. For example, some providers offer an endorsement that covers the cost of hiring a temporary worker while an injured employee heals.
Select a provider with a strong financial rating
When reviewing the benefits and risks of each provider, also pay attention to the financial rating associated with each provider. A financial rating can indicate how financially stable the provider is, and therefore, how likely the provider is to stay in business and pay claims. A strong financial rating can indicate that the provider has the resources to meet claims and pay the premiums associated with your policy. A financially healthy provider can offer you a better deal than a provider in financial distress. A financially healthy provider may also be able to provide you with better customer service. A provider with adequate resources may be able to respond to questions and concerns more quickly.
Require employees to have safety equipment
Another tip for reducing the cost of workers’ compensation insurance is to require employees to use certain safety and health equipment. For example, you can require employees to wear steel-toed shoes or hard hats while at work. For some types of equipment, the supplier may offer discounts on your workers’ comp insurance policy. You can see if your provider offers a discount for certain safety or health equipment. If you require employees to use safety equipment, that may reduce the risk of accidents in your workplace. That reduction may be reflected in your workers’ comp insurance policy, resulting in a lower premium.
Use an employee assistance program (EAP)
An employee assistance program (EAP) may be available to you through a workers’ comp provider. An EAP is a service that provides confidential advice and assistance to employees and their families in times of need. If a worker suffers a traumatic injury, an EAP may offer emotional help and advice. An EAP may also offer to counsel for employees with substance abuse problems. If an employee is a victim of domestic abuse, the EAP may also offer advice and assistance. By accessing an EAP in your workplace, you may reduce the likelihood of workers’ comp claims. That reduction may be reflected in your workers’ comp insurance policy, resulting in a lower premium.
Don’t forget about seasonal workers
Seasonal workers are sometimes excluded from workers’ compensation insurance. However, you can ask your provider if they offer a seasonal workers’ compensation insurance policy. Seasonal workers are generally defined as employees who work for only a few months a year. If you have seasonal workers who need workers’ compensation coverage, let your provider know. You can let them know what dates the workers will be employed, and they may be able to offer a policy that provides coverage for a limited period. If you’re shopping for a new policy, make sure to let your potential providers know about the seasonal employees who will need coverage. Providers may be more likely to offer you a lower rate if they know you have seasonal workers.
By offering safety incentives, you can reduce costs further
You can reduce the cost of your workers’ compensation insurance even further by offering safety incentives. You can offer safety incentives such as: Showing providers that you’re serious about safety and want to reduce the risk of accidents in your workplace may lead them to offer a lower workers’ comp insurance rate. Keep in mind that some state laws prohibit providers from giving a discount based on the use of safety incentives.
Workers’ compensation insurance is a legal requirement for most employers. It protects employers from being sued if an employee is injured on the job. While workers’ comp is necessary, it can be very expensive. However, employers can save money on workers’ comp by shopping around for the best deal, requiring employees to use safety equipment, and offering safety incentives.