Worker's comp insurance can be confusing, and your insurance agent might like it that way.
If you have employees, you have worker's comp. If you have worker's comp, you know it can be confusing, time-consuming, and costly.
Today, I'm going to tell you five things your insurance agent doesn't want you to know about worker's comp.
Watch the video below to learn more...
Need Workers Comp Insurance?
What Your Insurance Agent Doesn't Want You to Know About Workers Comp
When it comes to workers' comp, it can be a hassle. It feels like you don't have control.
The cost is constantly increasing, and no one can explain why. These are problems that you should not have.
And today, I'm going to explain to you why.
1) you have complete control over your worker's compensation premiums
The first thing the insurance agent doesn't want you to know is that you, the business owner, the risk manager, have complete control over your worker's compensation premiums.
And what I mean by that is the large fluctuations you see in price, the discounts, and the credits available to you; you have to control those.
There are very tactical, very straightforward things that you can do to bring your premiums down. This is especially true if you're paying tens or hundreds of thousands of dollars in worker's comp premiums.
If you're dealing with 50 employees or more, there are very real things that you can do to bring your premiums down.
Now, your agent doesn't want you to know this because they make money off you spending more.
And since most business owners have never been taught or had worker's comp explained to them in a detailed way, you don't understand what your experience mod means to your business.
2) Your experience mod Matters
Your experience mod is the most important factor in determining the premium of your worker's compensation program.
Now, there are a couple of factors to the experience mod, but I want you to know that number one means you are completely in line.
If your experience mod is a 1.0, you are completely in line with the expected losses.
So the size, type, nature of work, and losses of your business have been completely in line with your peers.
If you're below one, you are doing better than your peers. If you are above one, you're doing worse than your peers.
So if you have an experience mod above 1.0, call us today. This should not be the case, especially if you've been above one for more than two years.
It would be best if you had programs and processes to bring that backdown. We can help you do that. That's what we do all day long.
But know if you're above 1.0, you're paying more than your peers.
This means your general process and procedures and safety and the number of losses you have are more than expected.
Now, here's the catch. What happens for most people is they get just below one.
They get a 0.95 or a 0.96, and they're like, "We're doing better than our peers. We're fine." And that's what your insurance agent would love you to think.
You have a legal minimum for your class of business, for your size of business, usually somewhere between a 0.6 something and a low 0.8 something, depending on the nature of your work.
If you're in the 0.9s, you're still paying around 20% more than you should be for your worker's compensation.
And that's not counting discounts and credits. It is just ensuring you're with the right carrier, so your LCMS is in line.
So you have control over your premiums and can bring them down if you're doing the right things.
3) your insurance agent should be acting as your risk manager
Number three, your insurance agent should be acting as your risk manager. They should be advising you. It's part of the commissions that you pay to them.
You shouldn't be charged an extra fee for risk management services. Your insurance agent should use standard risk management services if they provide you with worker's compensation.
Now, it's not mandatory, and it's not part of their mandate as your professional agent, but it is a service they should provide because that type of guidance will get you on the right path.
4) Work with carriers that specialize in worker's comp
Number four, some carriers specialize in worker's compensation, and you need to consider them when looking at your worker's compensation program.
Some of these carriers are Pie, AmTrust, and Employers.
There are other companies like Chubb and Hanover, which will write standalone worker's compensation policies that have expertise in certain lines of business.
You do not need to marry your business owners or package policy.
You do not need to marry workers comp policy to the same carrier as your worker's comp. It's different than, say, your home and auto insurance.
Having them with the same company is a good thing.
You can separate your package or your BOP from your worker's comp.
It is often advantageous for you to do so because there are carriers with very specific appetites and pricing structures for certain lines of business regarding worker's comp.
You want to be properly aligned.
So make sure that your insurance agent is shopping these specific carriers for you so that you can get the best pricing possible for your worker's compensation.
And this isn't what happens. You write your BOP; everyone talks about the business owner's or package policy and focuses on that.
And then whoever you write that with, you throw on the worker's comp. Sometimes for some lines of business, that's fine.
But for most people, especially if you have 50 more employees or even 25 or more employees, if you're in the contracting industry, that is not something you should do.
It doesn't mean it won't be with the same company, but you need to look at others if you're trying to get the best rate available.
5) Apply For discounts and credits
And last but not least, some discounts and credits are very easy to get with standard documentation and implementing some programs in your business.
Things like drug-free workplaces and having a safety manual.
There are a few others that we could talk through that you can implement that aren't enormous credits, but they do help.
Especially as your payroll increases, and as the number of employees that you have increased, these things can create significant benefits over the long term.
And ultimately, they're put in place to help you have a safer, healthier work environment.
This is ultimately the goal of a solid worker's comp program.
It's not just to pay less; it's to keep your employees on the job to create more efficiencies and effectiveness in your workforce, to keep them healthier and happier.
These are just a few things your insurance agent may not want you to know about workers comp.
As a business owner, you must be aware of your policy's limitations to protect your employees.
This is where we come in at Rogue Risk.
If your current insurance professional has never addressed issues like this with you before, I will encourage you to reach out to us today.
- You can call or text us at 518.960.6600
- Click here to contact us via email.
I look forward to introducing you to a new viewing of your insurance program.