Purchasing Workers’ Compensation Insurance: A High Cost Expense For Businesses

As a business owner or employer, you have a legalare much different and quite a bit higher than those of
responsibility to the people who work for you. If anan office clerk. Therefore, workers' compensation
employee is injured at work, there could berates are much higher for roofing companies than for
considerable costs. Workplace law and employeradministrative companies.
responsibilities vary from state to state and country to 
country, but an all states (except Texas) employersTo arrive at  a base rate for workers' compensation
are required to purchase workers' compensationinsurance, each classification is translated into a dollar
insurance for employees. Even in Texas it isamount, which is then multiplied by 1% per $100 of the
advantageous to purchase the coverage because intotal payroll for the employee. For example, the office
most cases if an employee receives workers'clerk classification in California is roughly $1.25 per $100.
compensation, they cannot sue the employer. It is saidTherefore, if that employee is paid $500 per week, the
that workers' compensation is a "bar" to civil lawsuitsworkers' compensation insurance premium for the
against the employer.  employee costs roughly $6.25 per week.
  
Workers' compensation is also called employers' liability.Workers' compensation  insurance carriers can
It used to be called "workman's " compensation andreduce or increase rates based on a number of
although the name has changed, many people still referfactors. The most important factor is the employer's
to it as workman's or workmen's compensation. safety history. Another important factor is whether the
 employer offers health insurance to their employees.
Workers' compensation insurance is usually purchased 
by the employer from an insurance company althoughTo get the lowest cost workers' compensation
in a few states an employer must purchase it frominsurance coverage, you will have to know the number
the state. These states are called "monopolisticof employees, the amount of your payroll and your
states."revenue. Depending on your jurisdiction, workers' comp
 rates may or may not be predetermined. Even in
When purchasing workers' compensation insuranceregions where they are predetermined, quotes may
coverage, it's important to find the best arrangementdiffer depending on a broker's or agent's approach.
possible. In addition to the cost of premiums, there are 
considerations such as how much collateral theKeep in mind once you buy workers' comp coverage,
insurance company requires and the paymentyou can be mistakenly overcharged. That is why you
schedule.should make annual checks, called premium audits, to
 ensure your employees are classified correctly, and 
The cost of workers' compensation insurance isyour business is being charged the correct amount for
determined by each state. Although base rates varyeach employee. If rates ever go up unexpectedly, it is
slightly from state to state, the basic process eachup to you to look into the situation and get an
state uses to calculate base rates is similar. Theexplanation as soon as possible. And, in some cases,
premium depends on the number of employees andthe insurance company has the right to review your
cost of payroll. Each occupation is assigned a riskpayroll, and if it's substantially higher than they were
classification and each company is a little different. Risktold, they can charge you a higher premium in arrears.
is determined by the historical experience of two 
factors: the frequency of on-the-job injury and theWhere to Buy
severity of injury of the industry.Work comp coverage is available through local agents,
 regional insurance brokers, or online. Buying coverage
When you purchase workers' compensation insuranceonline makes sense for the small to medium size
for your business, it is important to remember youremployer. There are certain employers who will only
employees won't be contributing to the premiums asbe able to get coverage from the risk pools in their
they do with social security and unemploymentstates, but that can be coordinated through our affiliate.
benefits. This is one expense that employers areBy purchasing insurance through our insurance center,
required by law to pay.you can find competitive rates and special policyholder
 services.
Large businesses usually purchase insurance through 
an insurance broker who finds coverage and a varietyIf you want  to keep premiums down, it's a good idea
of payment plans depending on many factors includingto provide a safe and healthy environment for your
the size of the deductible and whether payment isemployees. It's also important to have a post-injury
made in one sum or monthly. Sometimes largeprocess so when there is an accident, the procedures
companies self-insure or use alternative types ofare clear from the time the injury occurs until the time
insurance such as captive insurance programs.the employee returns to work on either full duty or light
 duty. (workersxzcompxzkit)  A light duty program
In Florida, for example, roofers have the highestminimizes the impact of the indemnity portion of the
occupational risk classification, and office clerks haveclaim. That is the best and only way to keep your
the lowest. Obviously, the hazards of being a rooferrecord clean, and prevent claims against your policy.