If you do business in the state of New York, then you're already aware that things here tend to operate in a unique way. Workers' comp is no different.
There are several things that you need to know if you have employees operating in the state of New York.
This is to make sure that your policy is set up correctly, that you don't get a large surprise audit bill at the end of the year, and that, in general, you are not overcharged.
Today we're going to talk about what those things are.
Watch the video below to learn more...
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Workers Comp Insurance in New York: What You Need to Know
Now, when it comes to workers' compensation insurance in the state of New York, it's important to know that the rating board is its own unique entity.
It is known as the NYCIRB or the New York Compensation Insurance Rating Board.
This board operates independently from the larger organization, NCCI, the National Council on Compensation Insurance, which sets the rates in class codes for most of the states in the United States.
Why is that important?
It means that if you do business in any other state and have employees working or living in another state, based on how the class codes are used, you cannot immediately apply those to New York.
It also means that the rates here are different. It's just way more expensive to do business in New York State in general, and workers' compensation is no different.
A lot of that has to do with laws that have been passed, known as scaffold laws.
They're dealing with issues that have come up around some contractors and liability, how it's applied, and who it's applied to that have resulted out of New York City.
Regardless, no matter where you are in the state, whether it's Upstate, Hudson River Valley, Valley Central State, or Long Island, all these laws still apply to you.
And where this becomes an issue oftentimes is subcontractors.
Someone always has to pay the comp.
Either the subcontractor has their own policy, or you're picking up their comp. Very, very important. That's a broad stroke, but it's a good idea to keep in your head.
New York State uses an experience modification factor
A couple of other things that you need to consider are, one, New York State does use an experience modification factor in determining your final premium.
The experience modification factor is a multiplier off of your manual premium.
So the manual premium is a set rate by the company approved by the state times your payroll.
Once you get that manual premium, there are then a few discount factors, taxes, and then ultimately, an experience mod applied to it. If that experience mod is above one, your premium goes up.
If that experience mod is below one, your premium goes down. Again, that's a broad stroke, but it does give you an idea of what it is.
Another thing to consider in New York State is self-insurance is not an option unless you apply for it. Meaning there are three markets that you can go to.
There's private insurance, there's the New York State Fund, and then there's self-insurance. But self-insurance doesn't mean that you just don't buy a policy.
It means that you have to apply and be approved for self-insurance. You then have the New York State Fund. There are pros and cons to the state fund, and, then, ultimately, the private insurance market.
The private insurance market, if your business can qualify and you're working with an agent who knows how to place you with the correct carrier, is usually going to be your most competitively priced option.
And it is the most flexible during audit time. Ultimately, it delivers the best claim service if you have an issue.
READ NEXT: Drastically Reduce Workers Comp Premiums: 3 Small Actions
we're workers' compensation specialists
So if you have questions about placing your workers' compensation insurance, finding the right market, and putting programs in place, give us a call here at Rogue Risk. We'd be happy to work with you.
This is what we do all day long, we're workers' compensation specialists.
So understand that there are private insurance options. If you can't fit into one of those private insurance options, there is the state fund.
Understand that your experience mod is very, very important.
Managing your experience mod means managing your injuries, your safety programs, and the overall quality and culture of your business.
Because of the way the laws are set up in New York State, someone is always going to have to pay comp.
So it's either going to be you or that subcontractor and managing certificates of insurance, validating that policies are properly in place is a big part of workers' comp.
If you use subcontractors or outside vendors in your business, 1099 employees. There are a lot of regulations around 1099s, and what is a 1099 independent contractor, and what is not?
You have to be very aware of those things.
READ NEXT: How To Win The Workers Compensation Cost Game For Your Business
The Rub
Understanding worker's compensation insurance in New York can be confusing and time-consuming.
However, it's important to have a clear understanding of what this type of insurance covers so that you can make the best decision for your business.
There are many different types of policies and coverage options available, so be sure to speak with an experienced agent.
This is where we come in at Rogue Risk.
If your current insurance professional has never addressed issues like this with you before, I’d 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 way of viewing your insurance program.
Thank you,
Ryan Hanley
