Tips for Managing your Workers Compensation Insurance Policy

Workers Compensation can be a confusing policy to purchase. Completing a Workers Compensation Audit can be frustrating. Don’t allow this policy to be a source of annoyance, allow our office to analyze your insurance policy for discrepancies to avoid problems during your next Audit. The following is a snap shot of items to be mindful of when writing your policy:
-Incorrect payroll projections can be detrimental. The best advice that can be given is to take the time to report accurate figures and class codes at the inception of the policy. If mid-term hiring or staff reductions create a significant impact in your reported payroll then please contact our office to update your insurance immediately. Insurance carriers will allow you to make adjustments at any time. Adjust your monthly payment based on updated figures or put away funds so you can start budgeting for the additional premium you may be responsible for once the audit is conducted at the end of the policy term.
-You must make sure each employee is classified correctly. If not, you could be paying more than you should be. Or in another worse instance, you may be paying less and when your Workers Comp Audit comes around at the end of the policy term, you will find yourself getting hit with a costly bill you were not expecting due to misclassification. Contact our office to review staff job duties and ensure everyone is classified correctly. Class codes can not be added at the time of Audit or afterwards, so please address this matter prior to binding or as soon as possible.
-Use Independent Contractors with Caution. Most insurance carriers will add payroll for uninsured independent contractors to your policy at Audit. Merely agreeing with someone on an independent contractor status does not make it so. In addition to having a contract in place, the contractor should carry their own Workers Compensation policy. In absence of a policy, there are other factors that the insurance company will use to determine if an employee is truly Independent. Please contact our office before your Audit to ensure your policy is rated correctly.
-Be Aware of the Exclusion Requirements for your Organization. Each corporate structure has their own set of exclusion requirements. Contact our office to see if your company’s Owners and Officers are eligible for exclusion. Only owners that are excluded on a Named Exclusion Endorsement are excluded on the policy. In absence of an endorsement, the insurance company will charge premium for paid owners and officers.
-Owners & Officers are Subject to Minimum/Maximum Payrolls. Compensated Owners, Board Members and Officers are subject to a Minimum and/or Maximum payroll rating. If a compensated Officer has a payroll of only $1,000, they are subject to being rated at a current minimum of $52,000. If a compensated Officer receives $150,000 payroll then they are subject to being rated at the current maximum of $133,900. Please consider this when reporting payroll. Contact our office if you have any compensated Owners & Officers to determine if your payrolls are reported correctly.
Don’t let audit season get you down! Reporting and estimating accurately will save you the headache of additional premium bills. As always, we invite you to contact our office for a policy review at any time!