Workers Compensation rates fluctuate constantly. Rates can increase and decrease frequently, but, in most cases, they go up. Why does it happen?
To some extent, your past safety record determines the rate. Experience modification is a term that defines this trend. In the beginning, the number starts at 1. (Surprise, right?) Your experience modification multiplies your premium for the policy. For example, if your premium is $20,000 and your experience modification is 1 your premium will still be $20,000.
However, your experience modification will get lower if you have been in the business for a few years without work-related accidents. For example, your experience modification can decrease to .75 if you’ve been in business for 3 years without any workplace injury or medical expenses. This achievement comes from adopting good workplace safety practices. You’ll pay $15,000 in premiums ($20,000 times .75 = $15,000). As a result, you’ll end up saving $5000, which is fantastic!
Unfortunately, if you have a bad safety record, it’ll count against you. Your experience modification may go up and reach 1.5. If that happens, you will have to pay a higher premium ($20,000 times 1.5=$30,000). Essentially, you can save money on premiums by managing your employees safely.
Tips for Getting the Best Workers Compensation Rates
Workers compensation rates change as a result of workplace safety. It all depends on how serious you are about workplace safety. A work-related injury and subsequent claim can make it go up. Occupational safety is crucial. Here are some tips you might be able to use when it comes to handling your insurance policy easier.
- Don’t underestimate your insurance or what it can do for your business.
- Occupational safety should always be taken seriously.
- Workers Compensation coverage takes care of medical expenses, but there are limits to what it’ll cover.
- Avoid subcontractors with no insurance. Remember, you have no control over work-related accidents and you may be held liable. That means being left out-of-pocket.
- Always try to avoid workplace injury. Dealing with injured workers can be very stressful.
- Make sure the Workers Compensation cost is added to your bids.
- You must consider cover for all of your workers, especially if you know they don’t have worker’s compensation cover. Also, ensure you have a stronger hand when negotiating with your subcontractors. It’s essential because you don’t know whether a work-related injury will take place.
- Learn about Workers Compensation insurance and the process of dealing with injured workers. It’s an important cost of a business but most people know very little about this insurance. They feel very stressed when a work-related injury takes place. You will be able to overcome your fear of insurance when you learn about it.
So that’s why Workers Compensation rates change. Hopefully you now have a better idea of what to do to stop them from increasing. You have to make informed decisions about insurance to keep your experience modification at a reasonable level. If you are interested in getting the best Workers Compensation rates or want to know more, please contact Contractors Liability or call us at (866) 225-1950 for a 5-minute quote.