Workers’ Compensation Insurance 101

It’s estimated over 55% of businesses overpay for their workers’ compensation insurance.

There are many ways to reduce premiums, eliminate overcharges and headaches.  The Challenge is not shopping for the lowest quote rather finding an agent who knows work comp and how to reduce premiums and even get refunds for overcharges.

It’s important to improve your risk profile by analyzing and addressing issues creating larger premiums.

One of the biggest areas for improvement is the Audit. Work comp professionals have found Almost 80% of premium audits are incorrect. Sometime these errors are in the 100’s of thousands of dollars.

So if there are errors in your audit you’re likely being overcharged.  Take time to prepare for and understand the audit – having a work comp specialists to guide and help can be useful here.  Would you go to an IRS audit without an expert?

Prepare for the Audit.

Here is a check list.

1. Verify dates on the audit are the same dates on the policy.

2. Verify accurate classifications.

3. Does the policy contain class codes not on the audit?

4. Verify overtime and officer exemptions and limitations.

5. Review the certificates of insurance from sub/independent contractors.

6. Verify applicable credits, discounts, and use of correct experience mod

7. Verify all math is correct

8. Verify deposit premium – how much was paid in?

9. Was the policy cancelled mid-year?

10. Is there an Anniversary Rating Date that is different from the Policy’s effective date?

11. Does the audit add a charge for uninsured sub-contractors.

12. Does the audit include a charge for paid commissions?

13. Is there a charge for casual labor?

14.  Review physical operations to see if minor facility changes allow employees reclassifying to take advantage of a lower rate?

If you are in Minnesota and would like help or  a review call 763.244.3735 and schedule a time with a certified workers’ compensation specialist.

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