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Workers Compensation Insurance System in Texas

Why is the Workers’ Compensation Insurance System in Texas so different than other states?

Like all 50 states, the Texas Department of Insurance Division of Workers’ Compensation (DWC) regulates the state’s workers’ compensation system. It also certifies which employers want to self-insure. That’s right, Texas allows some employers to not carry workers’ compensation insurance. Now companies who do not provide workers comp coverage may be liable for medical bills and lost wages when an employee is injured on the job. There are certain standards the companies must meet in order to self-insure.

Government contractors are required to provide workers comp coverage for all employees working on a project. On top of that, most clients require their contractors to have workers’ compensation insurance. Employers who choose not to have workers’ compensation insurance (Nonsubscribers) must file an annual notice with the Department of Insurance and the employers who choose not to carry coverage must display notices of no-coverage in common working areas as well as give written statement to each new employee hired.

The ability to self-insure (otherwise known as opt-out) is only one part of the workers comp system that is different in the state of Texas. It definitely adds an additional wrinkle in to the already complex workers compensation system in the state, but there are other parts of the system that have an impact on the business community in Texas.

Texas Workers Comp Market

The market is very competitive for workers compensation coverage and premium rates are well below the national average the national median rates, at around 87% for 2014. Part of this good rate on premium is due to the strong economy in the state of texas, but also because of the strength of competition in the work comp market that drives down price.

Rates vary considerably between insurance companies and employers are advised to shop their workers comp coverage periodically. Small business owners can do this by calling multiple carriers themselves or they can shop with an independent agency who can quote from multiple carriers. The ability to quote from many carriers can help your independent agent ensure they find a carrier with the best price for your classification code.

On top of good rates because of strong competition for workers comp Texas offers several exclusions that are unique to the state of Texas.

Coverage Exclusions in Texas

Injuries that are excluded under the Texas Workers Compensation Act:

Intentional or self-inflicted injuries
Result from horseplay or voluntary drug or alcohol intoxication
Inflicted by someone else for personal reasons unrelated to the job
Result from voluntary participation in off-duty recreational, social, or sports events
Result from “acts of God” (like floods or hurricanes), unless the job has a particularly high risk of such injuries.

NCCI Workers Compensation Class Code 9014

Let’s Break Down Commercial Cleaning Companies

NCCI class code 9014, like most workers comp class codes, includes many different operations. NCCI stand for the National Council on Compensation Insurance. It is the main governing body for workers comp codes. These classification codes generally include a variety of operations. The classification manual from NCCI is written to include specific operations. It is called the Scopes Manual. Over time, additional operations are added to each individual classification code.

Commercial janitorial services is the primary operation contemplated by NCCI class code 9014. Janitorial Services are specifically defined as keeping a building clean. The businesses do this by routine dusting; mopping, vacuuming, waxing, or polishing floors. The janitorial businesses also empty trash; clean and wash interior walls; clean, sanitize, and deodorize restrooms. Office cleaning companies are the easiest operations to get insured (at the most favorable pricing). It is reasonably easy to get favorable workers comp insurance for commercial janitorial companies. Especially commercial janitorial companies that clean at retail and other light commercial spaces. It is difficult to get workers compensation insurance for commercial janitorial companies which specialize in cleaning at industrial settings. Industrial settings frequently lead to the business having to purchase coverage from the state’s assigned risk provider.

Difficult Operations to Quote For Code 9014

Favorable workers comp insurance is more difficult to get for certain operations. For typical commercial janitorial companies, the NCCI class code 9014 allows for maintenance and minor repair work. Most insurance carriers will allow up to 10% of operations to fall into this arena. Floor waxing is another operation which underwriters consider. Some carriers allow as much as 25% of the business activity to be floor waxing. If it is this amount or less the carrier will still quote accounts. Power washing is disfavored, and most carriers will decline to quote companies offering power washing. Although it is an operation included in code 9014, at least if performed at ground level.

Code 9014 allows for residential cleaning if it is less than 50% of operations. A different workers comp class code is used for primarily cleaning companies. That code is 0917. However, the majority of workers comp carriers will decline any account which does any residential cleaning as it is a less controlled work environment. With that said, at least in some states, The Hartford will still quote commercial janitorial companies with some level of residential cleaning. Having several years in business is generally an eligibility requirement in this case.

Insurance carriers favor interior operations over exterior operations. A small amount of exterior operations can be allowed, but work from heights or power washing usually lead to declines from insurance carriers. NCCI class code 9014 allows for ground level window cleaning. Class code 9170 must be used for businesses that partake in any window washing above ground level. This is much more difficult to get quoted by insurance carriers.

Other operations which are included in NCCI workers comp code 9014 include:

Exterminators

Some carriers will offer coverage to these businesses, but many will not. If there is any live animal trapping provided in services almost all of the insurance carriers will refuse to provide workers comp insurance.

Chimney Cleaning

This function is acceptable to most insurance carriers if the service is performed using the vacuum suction method at ground level. If the service includes work at heights for any employees, it becomes much more difficult to find a carrier who will quote workers comp coverage.

Residential Boiler Cleaning

This type of service frequently involves using vacuum suction equipment. Any work involving boilers is difficult to get quoted by nearly all insurance carriers.

Swimming Pool Maintenance

A few carriers will quote swimming pool maintenance companies. When the swimming pool maintenance company adds construction to their list of business operations, it becomes much more difficult to find a carrier willing to quote the business.

Pet Waste Removal Services

Pet waste removal businesses need to have sufficient payroll to find many carriers willing to quote coverage. There is a small possibility to get this quoted by carriers on the voluntary market.

There are many different operations that can be included in NCCI Class Code 9014. Especially for purposes of workers comp.

My Insurance Question is a creation of the experts at The Insurance Shop LLC. The agency was founded in 2005 and has developed partnerships with more then two dozen insurance carriers. This large amount of carriers allows the agents at The Insurance Shop to shop your policy around in an attempt to make the carriers compete for your business. If you are looking for a better value when purchasing your commercial insurance package, let us shop insurance, so you don’t have to. Give us a call today at 800-800-4864.

Have a Work Comp Audit soon?

Here are 7 tips for a Smooth Workers Compensation Audit

Each year all businesses must go through a workers compensation audit process. If you are like most small business owners, this is not one of your favorite parts of owning a business. The process can be long a tidious, but the more prepared you are for this process, the more quick and more smooth the process will be. Consulting with your independent insurance agent can help you prepare for the process and make sure the audit is done well the first time through the process. Here are 7 ways to ensure this process goes as painless as possible.

Communicate with your agent.

Open communication with your insurance agent is essential to a smooth workers compensation audit. This is a reason why it is important to consider an independent insurance agent. An independent agent is not as closely associated to the insurance carrier. They can help you prepare for the audit and negotiate on your behalf if anything does not go in your favor. Open communication throughout your relationship with your insurance agent is essential to a satisfied experience during your small businesses workers comp audit.

Have paperwork prepared in advance

Having all necessary paperwork prepared in advance of your audit will make the process move as smooth as it possibly can. This includes any and all payroll and employee records. Job descriptions need to be included for each employee and their annual weeks, days and hours worked. The more detailed the better.

Payment and cash disbursement records,

Throughout the year it is important to keep a record of all payments and cash disbursement. Not having these available and organized is a good reason to have the auditor dig a little deeper. The more open, honest and organized you are throughout the entire audit process the more smooth the process will be.

Certificates of Insurance

In order to ensure a smooth workers compensation audit, make sure to keep a detailed record of all needed certificates of insurance for any and all sub-contractors or independent contractors your business used. The primary reason for providing these documents is that if you do not, these contractors will be listed as employees and it can substantially raise what you pay in premium.

Experience Modification Worksheet

The experience modification worksheet is a document that is published annually by the rating bureau in your state. It covers the loss history for your business during the most recent three-year period, not including the most recent year. The most recent year is not included due to overlap from some claims not being closed. If you have had a large claims or a large amount of minor claims during any year it is important to have this worksheet available in order to show the true loss history of your business.

Make yourself available for the exit interview

After a typically smooth workers compensation audit there is an exit interview at some time. It usually lasts several hours and is a way for the auditor to ensure they have all the necessary information to accurately audit your business. The more up-front you are with the auditor the more smooth the process will be.

Respond promptly to auditor follow-up questions

There will more than likely be questions you do not have the answer to, the auditor will have for you during the audit. The more quick and more thorough you respond to these questions the more the auditor will work with you to promptly and accurately finish the audit process. The time period after the audit, before the auditor will finish the process, normally takes two to three weeks. There may be additional questions that need clarification. This may be a frustrating part of the process, but the more accurate the audit is the better it is for your company. Your agent can help you with any of these questions if you are having a trouble finding the exact information to satisfy the auditor. It is also important to keep in mind that for security purposes, the auditor does not keep your payroll records. You very likely will be asked to provide additional information or records that you have already provided.

An Accurate audit is in your best interest, moreso than a fast audit. This process is frustrating even during a good audit. It will take time away from your normal work, but it is within your best interest to ensure your audit is fair and accurate. Keep a positive attitude and consult your independent insurance agent in order to ensure your audit process goes as smoothly as possible.

HVAC Contractors

Heating and Air Conditioning Contractors ( HVAC Contractors ) are those business that provide services for and repair heating and air conditioning units. They provide these services for both commercial and residential clients. They have to be knowledgeable about both duct and vent work, the different types of fuel sources for heating equipment, which can be natural or LP gas, electric, steam, solid fuel, coal, or fuel oil. Many contractors also install, service, and repair air conditioners. While air conditioning units are normally electric-powered, they are charged with different coolants, some of which may be hazardous.

All of these different types of work bring their own unique risks to the contractor. For this reason, it is very important for you to have an extended conversation with your insurance agent about all of the types of work you do and do not participate in. It is equally important to inform your agent if there are certain types of work you do not partake in. There are more than one classification code for this industry and the types of risks you take on can dramatically impact what you pay in premium for a number of commercial insurance policies. Below are 6 policies most HVAC Contractors need to secure in order to protect their business properly.

• General Liability

• Property Insurance

• Hired and Non-Owned Auto (full commercial auto if vehicles owned)

• Inland Marine

• Business Income with Extra Expense

• Workers’ Compensation

General Liability Insurance

General Liability Exposures at the contractor’s office or shop are generally limited due to lack of public access to the premises. Retail sales increase the possibility of customers slipping, falling, or tripping if customers visit office to view products.

Property Insurance

Property exposures at the heating contractor’s own location are generally limited to those of an office, shop, and storage of materials, equipment, and vehicles. Operations may also include retail sales. The fire exposure is generally light unless repair operations involving welding take place on premises. Welding involves the use of tanks of gases that must be stored and handled properly to avoid loss. The absence of basic controls such as chained storage in a cool area and the separation of welding from other operations may reflect a greater risk.

Commercial Auto

Automobile exposures are generally limited to transporting workers, equipment and supplies to and from job sites for HVAC Contractors. Hazards depend on the type and use of vehicles and radius of operation with the main hazards being upsets. Vehicles may have special modifications or built-in equipment such as lifts and hoists. Large heating systems may be awkward and require special handling and tie-down procedures. Age, training, experience, and drivers’ records, as well as the age, condition and maintenance of the vehicles are all important items to consider. If employees utilize their own personal vehicles for work related tasks then Hired and Non-Owned Coverage should be purchased.

Inland Marine Coverage

Inland marine exposures include contractors’ tools and equipment, including ladders and scaffolding, hoists, and portable welders, the transport of materials, and installation floater. Goods in transit consists of tools and equipment as well as products purchased by the customer for installation at the job site. HVAC units can be of high value and susceptible to damage in transit; they frequently require expertise in loading to prevent load shift or overturn.

Workers’ compensation

Workers compensation exposures vary based on the size and nature of the job. Both residential and commercial work involves lifting, work with hand tools, wiring, and piping. Cuts from the fabrication and installation of sheet metal for ducts and vents are common. Lifting injuries such as hernias, strains and sprains plus back injuries may occur. Electrical burns are common; electrocution can occur from the use of high-voltage lines. Any time work is done above ground, injury or death from falls and being struck by falling objects can occur. Slips and falls, foreign object in eyes, major and minor burns, and inhalation of fumes are all potential hazards.

Electrical Contractors

Insurance needs and concerns for Electrical Contractors

Electrical contractors carry unique risks that many other businesses in the construction industry do not face. With those risks come additional types of insurance needs. Each electrician is unique in the scope and capacity in which they operate their business. Depending upon the type of work each electrician partakes’ in, there may be a number of types of coverage an electrician needs to secure in order to properly secure their business. Here is a list of 5 commonly carried coverages most electricians secure.

General Liability
Commercial Property
Commercial Auto
Inland Marine (Tools and Equipment)
Workers Compensation

General Liability

Exposures at the contractor’s office are generally limited because of the lack of access to the premises. Storing materials outdoors may create vandalism and attractive nuisance hazards. Electrical voltage is always a risk for electricians. This is due to the risk of electrical burns or electrocution to employees or other third parties. An electricians’ employees can cause damage to the client’s property and can cause bodily injury to members of the household, the public, or employees of other contractors. These are risks that are covered by a general liability policy.

Commercial Property

If you own a property; no matter how small, your business needs to secure commercial property coverage. Property exposures at the contractor’s premises typically are fairly low for electricians. This is generally limited to those of an office and storage for supplies, tools, and vehicles.

Commercial Auto

Automobile liability exposure is higher for electrician than other brick and mortar businesses. Most electrical contractors are in transit to transport workers, equipment and electrical supplies to and from job sites. A driving hazard is a huge risk for insurance companies to insure. The more time your business spends driving the higher the likelihood of claims. Those claims tend to rise in both frequency and severity. Implementing a safe driving program and keeping up to date driving records for all employees can help limit what you pay in premium. Age, training, experience, and drivers’ records, as well as the age, condition, and maintenance of the vehicles, are all important items to consider.

Inland Marine

Inland marine is also commonly called ‘Floaters’ coverage. It is meant for specialized equipment that is frequently in transit as a part of business operations. The exposures often include owned or rented equipment, building materials, as well as materials being transported to and from the job site. This is commonly needed for businesses that transport their equipment to a third party site for use delivering a service. The most basic example of an industry that needs this coverage is a landscaping company. It can also include any business that takes equipment away from the premises for use as a part of normal business operations.

Workers’ Compensation

Workers compensation insurance is required by law in 48 out of 50 states. Each state has their own specific exclusions depending upon the number of employees and the scope of your work. It is important to check with the proper governing agency in your state to determine if you are required to purchase this coverage. Even if you are not required to purchase this coverage in many cases it is still beneficial to your business to secure it. The coverage provides you with protection from lawsuits that may result from injured employees who are injured as a result of normal business practices. Employees give up the ability to sue for normal injuries, but get back coverage for their medical expenses and some portion of their wages while they are hurt and not able to work. Typically they are reimbursed 60 percent of their normal wages for the time they are not able to work.

Florida faces another new twist.

The workers’ compensation market in the state of Florida has faced some turbulent times over the last year. More shocking news came the Wednesday before Thanksgiving in the form of a ruling by Leon County Circuit Court. Judge Karen Gievers released the shocking news in the form of a ruling in a case that claims the National Council on Compensation Insurance (NCCI) and the Florida Office of Insurance Regulation (OIR) did not follow proper procedure under the states Sunshine Law.

The case that is challenging this ruling was brought before the court by James Fee. Fee is a Miami attorney who represents injured workers. He claimed, and Judge Gievers agreed, that NCCI was in violation of the Sunshine Laws by holding “multiple, non-public, secret meetings” internally and with the OIR over the rates. Representatives with NCCI and the OIR claim they have complied with the Sunshine Laws.

How much was the rate increase in Florida?

The total rate change was an in crease 14.5% for workers compensation insurance coverage, on average throughout the state of Florida.

What cause the rate increase?

The rate increase was the result of two court cases, Castellanos v. Next Door Company and Westphal v. City of St. Petersburg, and updates to the Florida Workers’ Compensation Health Care Provider Reimbursement Manual mandated by Senate Bill 1402.

Castellanos vs. Next Door Company

Marvin Castellanos was an injured employee who sued Next Door Company. This court decision ruled invalid a previous court ruling from 2009. The previous ruling put in place a mandatory attorney fee schedule. THe overturn of this ruling means judges no longer have to stick to the mandatory fee schedule and now can award additional compensation for attorney’s fees. The judges now use the fee schedule as a starting point. This will cause the amount judges award to injured employees to increase dramatically because there is no longer a cap on what the judges can recommend for compensation to the injured employees attorney fees. This ruling resulted in the Florida Office of Insurance Regulation (OIR) approving an increase of 10.1 percent on average statewide.

Westphal v. City of St. Petersburg

The Westphal vs. City of St. Petersburg case found the 104-week statutory limitation on temporary total disability benefits to be unconstitutional. The Florida Supreme Court reinstated a 260-week limitation. This Increased the amount of time an injured employees will get partial salary benefits by an additional 156 weeks. This additional 156 weeks of coverage caused the OIR to approve an average increase of 2.2 percent statewide.

Senate Bill 1402

The additional 1.8 percent increase on premium for workers’ compensation was related to updates within the Florida Workers’ Compensation HCPR Manual. This increase was approved as part of Senate Bill 1402.

14.5% Workers Comp Rate Hikes in Florida! What do I do now?

You do what you can to do your business every day and create opportunities for yourself, your employees and your customers. Rates of everything is rising, property cost, materials, shipping, employee wages. The state of Florida has now said its time for workers’ comp insurance to do the same. The rate increase is to be 14.5%! Articles can go into much more detail but ultimately medical costs, legal costs and claims expenses rise over time and Florida workers compensation rates are rising to catch up for the natural changes that have taken place and certain court rulings have made precedence that support the increased cost. There are fair arguments for and against this change but at this point we work with what we have, so as a business owner what can you do?

The state of Florida is a rate mandated state for Workers Compensation which means the starting rate is the same for everyone based on their classification code, so every carrier should be offering the same rate. There are some exceptions that can be helpful for you to keep in mind. Here are a few things that can help benefit you in combating this increase with a more competitive option:

There are some exceptions: Some of our carriers have programs for particular industries that allow for discounted rates(5% below state set rates) one in particular caters to Retail stores, Restaurants and Professional Offices(Law firms, Accountants, Doctors offices, etc.)

Check with appropriate discount programs: The Florida workers compensation system has discount options available if you meet the guidelines and have these policies in place for your business. They do have an application for each and require certain protocols in place but these can save 5% on your Florida workers compensation rate.

Drug Free Workplace Credit
Safety Credit

Divident Plans: Some of our carriers offer dividend plans in Florida that reward businesses that control their claims. One in particular offers a 5% dividend for businesses paying 5-10k in premium and keeping a loss ratio under 5% and for accounts over 30k in annual premium they can qualify for a 20% dividend if they have a loss ratio under 20%. Like anything they do have some basic eligibility criteria but this is a huge way to reward safe business operations and lower your overhead against your competition.

Review loss control Measures: We do understand accidents do happen, however most accidents with better preparation can be prevented. A few areas to focus on:

Hiring Practices: Hiring the right employees that are experienced in the field and vested in your business are your lifeblood. Don’t put that in the hands of just anyone.

Safety Controls: Start with OSHA basics and if you have a unique business you might need more. Keeping your employees safe and preventing workers comp claims is the best way to save money on your workers comp.

Document everything: If you have safety meetings, a safety policy, drug free workplace, make sure this is all in writing and in your employee handbook. Make sure sign offs are in place so your employees are aware of these policies. This can be a great tool to prevent claims and keep a culture of safety that you take seriously in your business.

Manage your workers compensation claims: As you develop an Experience MOD over time for your Florida workers compensation claims history, your premium can go up or down based on this experience. This means your premium is directly affected by claims you had 2-5 years ago. Settling those claims and learning from them can help you combat the rising workers comp costs. This process takes time but you will thank yourself in the next couple years as that MOD drops lower.

Buy in to avoid the increase: If you have not placed your workers comp coverage for your business yet and are in the market, get this coverage before December 1, 2016. This is when the rate change takes place. You will still have to face the rates next year but at least this is one year you are paying 14.5% less on this policy.

Put some skin in the game: Especially if you are paying premiums in excess of $20,000 annual, Deductible plans as well as coinsurance plans can allow you to put some skin in the game and take on a little risk of your own. Some start as small as $500-$1000 deductibles but go up and the savings increases with that. It might not make a lot of sense for the smaller premium amounts but this is a good tool to help save money without putting too much of your business at risk. Pick a deductible that saves you money and you feel comfortable with.

Alternate payment options: Plans like Pay-As-You-GO can be helpful tools which allow you to pay your premium when you run your payroll. This won’t change the price but for companies that have a tough time with premiums in the slow season but still have a year round payroll, this can be a great solution.

In times like these were pricing can have such a direct impact on your business and its livelihood, Rate increases are inevitable, however taking these steps above if you are not already, could show savings of up to 25% below market for some clients but 5-10% is very obtainable for most clients. The increase in Florida is a tough one to swallow, however taking these actions could allow you to offset these increases. Speak with one of our Professional Insurance agents to learn how you can implement and benefit from some of these tools.

Overcoming Difficult Workers Compensation Situations

Often times I speak to business owners that are experiencing difficulties with their work comp coverage. Either they are being non-renewed and cannot locate an alternate option OR their renewal pricing has skyrocketed to a point they are begging for help to locate a less expensive alternative. Typically, the difficult situation is related to claims. Below is a real life situation with a business that I assisted solving their difficult workers’ compensation situation and how the changes they made within their business helped decrease their pricing in future policies. For purposes of privacy, I am using a false business name, Test Company, Inc.

When Test Company, Inc. contacted my agency, they were up against a non-renewal, no other insurance company options and had employees in multiple states. Within work comp there is a state program that is required to offer coverage even with bad claims history or a difficult industry to insure. The state workers’ compensation programs are higher rates and typically do not have a flexible payment plan so cash flow becomes an issue. Also, instead of having 1 annual workers’ compensation audit for all states with 1 company, Test Company, Inc. was going to need to complete 12 audits, 12 separate policies to monitor and make payment to. Most state policies only cover that particular state so a separate policy is purchased for multiple states when private insurance companies are not willing to quote.

Test Company, Inc. had grown from 0 to 6MM in gross receipts in 5 years and suffered several very substantial claims. Their workers’ compensation cost had increased from 200K to nearly 500K due to their claims experience generating a very high experience modification rating and the competitive companies unwilling to quote. The ownership of the business was so focused on growing, they didn’t think about how claims were going to cause this big of a problem with their workers’ compensation coverage. Claims were happening over multiple years of coverage and it finally caught up to them so they were forced to identify the problems and fix them.

Together we identified the reasons for the claims and communicated about realistic business practices that needed to be implemented to prevent similar claims from happening in the future. The employees working in the field have a constant driving exposure and when working at the customer’s home, the Techs are moving heavier items. There was a driving and lifting exposure that were causing the claims. First step was to set-up a Motor Vehicle Report (MVR) program to review the driving history of the employees in a vehicle to make sure those employees have a safe driving record. When setting up a MVR program Test Company, Inc. must establish a set of requirements that are considered “a safe driver”. Most work comp providers have resources the insured can access to help with establishing guidelines to prevent claims, ask the insurance companies “loss control department” for assistance if your agent doesn’t know. Secondly, we discussed hiring practices for Techs. Since these employees have a lifting exposure it’s important to hire employees that are strong enough and haven’t experienced injuries in the past that could lead to a large workers’ compensation claim. A pre-employment and annual physical for all Tech’s was the solution Test Company, Inc. implemented.

With a business of this size and growing, claims are going to happen. When there is a claim, what can Test Company, Inc. do to minimize the amount paid?

It’s amazing how stories throughout the process of a work comp claim happen. One of the best suggestions to prevent an employee’s story from changing is to Immediately document the injury, have the employee sign the injury report form, have a supervisor or key employee drive that employee to the medical clinic and have the supervisor or key employee sit with the doctor’s office when explaining what happened that caused the injury. Record it with a cell phone if it’s allowed and you think it’s needed. These steps will prevent a story from changing and an employee’s injury mysteriously becoming more serious than it should have been.

Return to Work Program. This particular insurance company has a non-profit program where their insureds can set-up a light duty return to work program with a local participating non-profit. Test Company, Inc. did have a work comp claim where the Return to Work Program worked perfectly. The Tech employee hurt their back, therefore, could not lift the objects within the homes they would be working on. This employee was set-up with a local non-profit where the employee sat at a table and folded towels. 2 days of doing this and the employee’s back felt better, he was released by the Doctor, the claim was closed and the employee returned to work.

When making these changes it’s extremely important for Test Company, Inc. to put them within their Employee Handbook, communicate those changes to the employees and have them sign off on a notice form. This helps set the standards for current employees and future hires.

The pricing decrease doesn’t happen overnight. The business must implement changes then experience 1,2,3 years of positive claims history proving their changes have led to a safer business to insure.

Declaration Page. What is it? Where is it? Is it important?

I am sure at some point in time you have had an insurance agent ask you for your policy declaration page or pages. If you are like most business owners, you think to yourself what are they asking me for. Basically, what these pages represent are the cliff notes of your insurance policy for that particular line of insurance. You will notice that your worker’s compensation declaration page is shorter than your business owners package or general liability. These declarations will not list all of the exclusions in your policy. It will only list the coverage limits you currently have. Here is the definition of declarations: The front page (or pages) of a policy that specify the named insured, address, policy period, location of premises, policy limits, and other key information that varies from insured to insured. The declarations page is also known as the information page. Often informally referred to as the “dec” or “dec page.”

The next thought most business owners have is, where do I find the declaration page. The declaration page or pages can be found in the front 3^rd of your insurance policy. Most of the time it’s within the first 10 pages. This is especially the case for worker’s compensation. For your general liability and business owners package policy it may be a few further pages in. The key to identifying it is when you start to see wording such as limits or premium. When you see that and how the premium pricing is broken down then you are in the right place. It will show your experience mod from the current term, premium discounts, state taxes, fees, expense constant, and a few other items on there. Some of this will vary on what type of policy it is.

This information is important to insurance agents for a wide variety of reasons. Most of the time a business owner thinks we only want to see these pages so that we can beat the price on your current policy. Yes, that is helpful information to use but it doesn’t necessarily mean that our carriers will just price it below your policy just in order to win your business. Our underwriters like to know pricing information so they can compare it to other policies that are either doing the exact same type of business or something very similar, and offer you a quote accordingly. If they generally don’t know what you are paying, then they will go on the conservative side and offer a policy that is in the average of pricing for that industry based on where they have priced and written the type of business you are doing. I feel, the most important reason for this to me is that I like to view these pages to give you an apples to apples comparison of the two policies. Also, I can check to see if you are truly covered correctly. If their may be gaps that are missing some key coverages or are underinsured in areas that you would not want to be underinsured in. Thus we can present you with a quote exactly like the one you have with the same coverage and limits. This will also enable us to present another quote option, if necessary. Typically this option is where we think your limits should be and additional coverages that you may not have that most people in your line of work have. The key to remember when being asked for your declaration page or pages is that we as insurance producers are wanting to make sure your covered correctly and at a fair price. We are here to get you a fair price, but we are also here to make sure you do not have any gaps when a claim does occur. We don’t like audit surprises or coverage gaps at the time when you think you are covered just as much as you do. The declaration page is so much more than just a price to beat.

The Importance of Accident Prevention in the Workplace

It may seem obvious that it should be the goal of employers to focus on accident prevention in the workplace. However, for those that need a little additional encouragement, here are some reasons to prioritize safety in the workplace.

Caution signs are essential to accident prevention in the workplace.

Accidents are financially expensive

Businesses exist to create profit. Most businesses are relatively low profit margin and work very hard to create that profit margin. Workplace accidents lead to extra financial expenses. They can also add costs to insurance policies through increased rates or a worse experience modification factor.

For example, if a business operated at a ten percent profit margin (which is well ahead of many businesses), they would need $50,000 in additional revenue to offset $5,000 in extra expenses created by an on the job injury. That could lead to extra hours worked by ownership, having to cut positions or hours or other difficult budget decisions.

Reduced workplace morale

There are more than just financial costs due to workplace injuries. A lack of accident prevention can reduce morale of other employees. Sometimes the morale can be reduced as a result of having to work longer hours or harder to make up for injured employees that have to miss work. It may result from financial strain on the business due to the injury. It also may arise simply because employees don’t like to see their co-workers suffer.

Recent Trends

It’s hard to argue against the importance of workplace safety. As a result, there have been recent trends by workers’ comp insurance carriers to help with accident prevention in the workplace. Carriers such as Missouri Employers Mutual, Utah Business Insurance Company and Guarantee Insurance Company offer extensive loss control services. Additionally, some carriers offered reduced cost items for workplace safety. These items include The Hartford’s Shoes for Crews incentive, incentives for a healthier workplace, weight loss programs as well as discounts on ergonomic office furniture. Missouri Employers Mutual just launched a safety grant program for their clients to help defray the costs of large one-time purchases to make workplaces safer.

Most employers want to protect their employers and focus on creating a safe workplace. Some of the reasons listed above highlight the benefit to focusing on preventing workplace accident for all employers.