Workers’ Compensation is one type of insurance that is required by law in nearly every state in the country. Because of this it is imperative that all business owners take advantage of every way they can to save on this required coverage. There are a few things business owners can change about their daily operations that can have a noticeable effect on what they pay for worker’s compensation insurance.
Keep a well-documented safety program.
Keeping a well-documented safety program includes a return to work program for injured workers and a detailed driver safety program if you have workers who will be driving as part of their normal work related duties. Safety programs do not have to take a lot of time away from your normal business routine to help you save your business money. It can be as little as a 15-minute huddle once a week. The meetings do need to be regular, but they can be weekly, bimonthly, monthly, whatever you determine is best for your business. Attendance should be recorded as well as the subjects covered at each meeting. A well-documented safety program can really benefit your company when you do have an injury. If you have a well-documented safety program in place than your agent can speak with your insurance carrier and defend your business as one that is taking the needed steps to limit claims. If you have these programs in place the agent can more easily show the injury as more of an outlier and not a sign of trouble ahead.
Make sure you are in the proper classification code
Being placed in the wrong classification code happens more frequently than one might imagine. This can change what you pay in premium both positive and negative. There is an audit at the end of every term so this can cause unexpected costs at the end of the year for many businesses. Landscaping is a good example of an industry that has two classification codes that are much different in price. The two main classification codes for landscaping are 9102 & 0042. 9102 is for businesses that maintain already existing lawns and garden beds. 0042 is for businesses that design and install lawns and beds. This is a more dangerous undertaking and costs more in premium. If you are not crystal clear with your agent what your business does on a daily basis, they may assume you are in a riskier classification code. This can cause your business to pay more in premium than it has to. This can be a problem even if you pay too little because an audit is run at the end of every term and if you are than classified correctly, any premium that is owed will then be due.
Actively ask your agent for approved credits and discounts.
Credits and discounts are available for many industries. They are offered by the state and the individual carriers to help business owners save on premium. Your agent has to ask for them in order to get the full amount of discount possibly available. If you bring this to their attention as a priority early in your interaction with them they will know to actively seek the best price. Insurance Agents have to deal with many business owners on a daily basis and the priorities of each business owner may be very different. Many business owners value their time above anything else. These business owners may rather pay a little more in order to just have the process over. If price is an important determining factor in your choice to buy commercial insurance, then let your agent know this up front. That way they can actively seek out every credit or discount available.
Price shop, but do it carefully.
You should always shop your policy around to make sure you are getting a competitive rate. This is the first thing to do when you want to save on commercial insurance. Switching for a moderate discount is not advised. This becomes important when your business inevitably has a claim. Your business will have a claim at some point in time. If you are a customer that has been with the carrier for several years, they are less likely to raise your rate on decline coverage of you altogether. If you are a business that switches carriers every year for a modest decline in price than you are much more likely to be dropped from coverage when a claim does occur. If you are dropped from coverage and cannot find insurance from another carrier than you are forced in to what is called the state fund. Policies in the state fund are much more expensive and depending upon your state once you are in the state fund you must remain there for 2-4 years.
Have an informative website.
A website is beneficial to your business in more ways than just marketing. When you are applying for commercial insurance your agent is going to ask several questions about your daily operations. They are going to investigate it and so is the underwriter of the insurance carrier you are getting a quote from. If you tell them, you only do one type of business and your website shows you are doing something else than you better be prepared to explain what you do or do not do on a daily basis. On the contrary if you have a website that confirms what you have told your agent it will strengthen your relationship with them. This will help when and if you have a claim and need them to help you explain what happened to your insurance carrier.
Consider changing the limits to your policy
The limits of your policy are important to protect your business, but they are not set in stone. They are not the same for every business owner either. Some business owners want to protect their business fully. Even protect it beyond what could imaginably happen to their business. Other Business owners are quite comfortable taking on more risk. If you are one of those business owners than lowering your limits is one way to lower what you pay in premium. Now most carriers will have a minimum amount you have to take, but if you are above those limits it may be worth your while to speak with your insurance agent about the pros and cons of lowering those limits. As long as you are making an informed decision and you know the risks you are taking lowering the limits of your policy can be an effective way to save on premium.
