When you have a business with employees, you need to carry workers’ compensation insurance to protect them. Unlike other types of insurance, you can’t shop around for quotes, but there are still things you can do to save money. Keep reading to find out what you need to know.
What You Need to Know About Workers Compensation Insurance
Here are some key things you need to know when buying workers’ compensation insurance.
Workers Compensation is Mandatory
You have to buy workers’ compensation insurance by law. In Minnesota, all employers need to buy it. Other states have exemptions for very small employers. The rule you need to follow is for the state your employees are in, not your headquarters. That means if you have employees in multiple states, you may need to keep track of multiple sets of rules.
Your Rate Varies Based on Your Claims History
While worker’s compensation rates are fixed, there is an adjustment for your claims history. This is called the experience modification rate, and it gets multiplied by the rate you looked up in the table. A mod of 1.0 means you have an average number of claims and no change in your rate. If you have more claims, your mod goes up, and your rate increases. If you have less claims, your mod and your rate falls over time.
How to Pay Less for Workers Compensation Insurance
The main way to pay less for workers’ compensation insurance is to lower your experience modification rate. That means taking steps to make your workplace safer.
- Encourage early reporting of injuries. Some employers try to discourage reporting of minor injuries because they think it will make their claims go up. However, this creates the risk of a more serious injury and a larger claim. Early treatment reduces your overall costs.
- Provide ongoing safety training. Emphasize safety at all times. If you only do it on hire, employees will think that’s just the book way of doing things that doesn’t happen in real life. Continue to reinforce your safety training on a regular basis.
- Provide safety equipment. Provide any necessary safety equipment for your employees. If they have to buy and maintain their own, they may cut back trying to save money. However, you’d still be responsible for any injuries that could result from them not having proper equipment.
To find more ways to save money on workers’ compensation insurance, talk to your insurance agent. Krog Insurance has multiple locations in Minnesota located in and around St Paul & Virginia. Contact us now to request information or a quote.
