In business, managing expenses is not just about cutting costs – it’s about making smart choices. Workers’ compensation insurance is one area where savvy decision-making can lead to significant savings. This article is for business owners willing to take the necessary actions to see results. Let’s dive into strategies that actually work.
1. Control Your Risk:
Insurance providers assess risk to determine rates. If your operation screams high risk, expect higher premiums. However, there are effective strategies to mitigate this. First, address any past claims promptly and maintain a clean claims history. Second, implement robust risk control programs. This isn’t just about ticking boxes; it’s about taking proactive measures to control your risk. Just as important is your ability to communicate these improvements to your insurer. Tools like Smarter Risk’s platform can streamline this process, making it easier to improve your risk and communicate those improvements. To get your free assessment, start here.
2. Safety First: Savings Second
As part of your strategy to control risk, a strong safety program is your best defense against high insurance costs. By identifying and mitigating workplace hazards, you’re protecting your employees and reducing the likelihood of claims. This proactive approach to safety can lead to fewer claims and, by extension, more affordable workers’ comp insurance. If you need help building a program, our Policy Builder and Forms library is a turnkey solution to get you from zero to hero in no time! Get the details here.
3. How to Choose an Insurance Agent/Agency:
The right insurance agent is a game-changer. A good agent doesn’t just sell policies; they partner with you to manage risk. They should be proactive, discussing risk control and safety as pathways to better long-term rates. A red flag? An agent who’s silent on these issues. Also, pay attention to the renewal process. A dedicated agent will start strategizing with you 90 days before renewal, ensuring your risk is marketed appropriately. Suppose you’re getting a standard renewal notice in the mail with no prior discussion. In that case, it’s time to shop for an agent invested in your business’s success.
4. Classify Employees Correctly:
Misclassification can be a costly error. Ensure employees are correctly classified according to their job role and risk level. This accuracy is crucial in avoiding overpayment for insurance coverage. Work closely with your agent. On the flip side, do not be tempted to misclassify your employees to get a lower rate on purpose. This tactic is not only unethical but could create serious issues in the event of a claim. If your agent suggests this, find a new one.
5. Shop Smart to Find the Best Workers’ Compensation Rates:
Regularly seeking insurance quotes is standard advice, but it’s not always the silver bullet it’s made out to be. The real strategy lies in shopping smart. This means finding an insurance agent who can present your business as a low-risk, attractive option to insurers. This strategy increases your chances of getting better rates and positions you as a desirable risk in the eyes of insurers. However, exercise caution with how often you shop around. Underwriters, seeing your business’s name too frequently, might hesitate to offer quotes due to the time and expense of underwriting new accounts. Before taking on that time and cost, they must believe they have a reasonable chance of securing your business. Remember, this tactic won’t work in states like Ohio, North Dakota, Washington, or Wyoming, as workers’ comp is confined to state-run programs. In other states, a well-timed, strategic approach can lead to significant savings.
6. Consider Excluding Yourself:
Business owners can exclude themselves from workers’ comp coverage in many states. This can lead to cost savings, but it’s a decision that shouldn’t be taken lightly. Weigh the risks carefully; if you opt out, you won’t have coverage if you’re injured on the job.
Conclusion:
Affordable workers’ comp insurance is achievable but requires a strategic approach. It’s about being proactive in risk management, prioritizing safety, working with the right insurance agency, ensuring accurate classification, shopping smart, and making informed decisions about owners’ coverage. Adopting these strategies allows you to secure insurance that meets the needs of your business while saving money. In summary, put in the work and make your company a better risk. It will pay off. When it comes to workers’ comp insurance, the best offense is a good defense.
