Workers’ compensation insurance is expensive. And not all workers’ compensation insurance carriers provide the same services. Some insurance companies offer more than financial protection and coverage in case something goes wrong. So, before you buy your WC insurance, ask what you are getting in return.
When shopping for workers’ compensation insurance, you have four main options:
A key advantage of going though an agent or broker is that you get face-to-face contact and the opportunity to ask questions and get information.
Something to keep in mind as you work with an agent for your workers’ compensation insurance is your experience modification rate (EMR). Experience rating is a mandatory plan that applies to all employers that meet a state’s premium eligibility criteria (varies by state). If you are eligible, your EMR is impacted by the frequency and severity of claims you had over the first three of your last four experience years. This information is tracked by rating bureaus such as the National Council on Compensation Insurance (NCCI) and provided to insurance carriers to use in calculating your premium. To get more information on what an experience modification factor is watch our video.
An EMR of 1.00 is considered average, less than 1.00 will reduce your premium, and more than 1.00 will increase your premium.
For example, if your annual premium is $100,000:
$ 100,000 x 1.00 EMR = $ 100,000
$ 100,000 x 1.50 EMR = $ 150,000
$ 100,000 x 0.50 EMR = $ 50,000
As the example shows, your EMR can significantly change what you pay for work comp insurance.
Knowing this, you should be asking potential carriers what they can do to help lower your EMR—or to keep your rating low—saving you money.
When talking with a potential insurance carrier, include the person who is responsible for your company’s safety in the conversations. Your safety manager might have additional thoughts or questions that can help you find a carrier that will not only cover your financial responsibilities, but also value the safety of your employees and the success of your business.
Don’t just shop for price—look at all the services that are included in your premium and make a decision that works best for your business. An independent agent can add tremendous value and support as you make insurance decisions.