If you’re considering purchasing a worker’s compensation policy but aren’t sure where to start, we’ve got some great tips for you! Click here for eight ideas.
There are almost 30 million registered small businesses in the United States alone. Add to that number the staggering amount of medium and large sized companies and you get a real sense of the pride Americans take in working for themselves.
Running a business isn’t all upsides though. There are a lot of protections a business owner needs to arm themselves with in order to avoid catastrophe.
Among those important things to arm yourself with is a quality worker’s compensation policy.
Worker’s compensation policies protect employers when employees get injured on the job and are consequently unable to work. This policy disables employees from suing employers and allows employers to control costs that revolve around costly accidents.
If you’re in the market for a workers’ compensation policy, you may be overwhelmed by your options. To help you find the right policy for you, our team has put together 8 brief buying tips below.
1. Know What Your State Obligations Are
In order to buy a worker’s compensation policy that covers your business, you’ll first need to understand the extent of coverage you’re required to have by law. This will vary from state to state so don’t just go by the word of an acquaintance who owns a business out of the area.
Either speak to local business bureaus or hire an attorney to make sure the policy you purchase will be in compliance.
2. Find a Trustworthy Insurance Agent or Broker
There are a lot of insurance salespeople out there whose aim is to sell you on the largest policy they can get you to walk away with. These are not the kinds of people you want to be working with.
Your aim when buying a worker’s compensation policy should be to get matched with the best coverage for the size of your business and its relative risk. A good agent or broker can educate you on everything you need to know, present you with unbiased options and ultimately, have you walk out with a policy that’s perfect for your needs.
3. Be Proactive in Promoting Safety
Just because you have worker’s compensation doesn’t mean your aim should be to use it as your solution to all of your safety issues. Frequent claims can raise your policy costs substantially and render you unable to pay for it. For that reason, you’ll want to start initiating safety training and measures around your workplace to make sure your insurance policy is just a safety net.
An added benefit to having safety training conducted in your workplace is that many states offer discounts and credits for doing so.
Talk to your broker about what credits might exist in your area.
4. Never Stop Educating Employees
Whether or not you’re eligible for credits from your state, training should not be a one and done thing. Employee safety is something that should put on your team’s radar at least once a year.
For that reason, prior to buying your policy, plan on reminding old employees and educating new ones on workplace safety protocols by conducting annual training sessions.
5. Know What Your Policy Does and Does Not Cover
There’s nothing worse than making an insurance claim just to find that your business is not covered. To avoid that fate, look through your policy thoroughly both with your insurance agent/broker and on your own or under the guidance of an attorney.
Understanding what you’re protected against can help you set up processes to help you mitigate risk in uncovered areas.
6. Know Your Employee’s Classification and What that Means for Costs
Nobody wants to pay more than they need to for insurance. In order to avoid overpaying, it’s important that you’re aware of the fact that different worker classification codes have different prices attached to them with worker’s compensation.
For that reason, be sure to classify your employees accurately so you can get the right price.
You can learn more about classification codes at National Workman’s Comp.
7. Don’t Skimp on Your Policy
When shopping for a worker’s compensation policy, it can be tempting to buy the minimum coverage that keeps you in compliance with the law. While this can save you money in the short term, in the long term, it can be extremely costly.
Remember, it has taken you years to build your business. If a few dollars extra per month is going to be the difference between you keeping it and losing it, we strongly suggest investing the extra money.
8. Plan on Regularly Reviewing Your Policy
Your business is a living, breathing thing. Your insurance policy should be treated the same way.
As your business changes, you’ll want to make sure that the policy you have changes with it to make sure you’re never without the coverage you need.
Wrapping Up Tips for Choosing the Best Worker’s Compensation Policy
Having a good worker’s compensation policy behind your organization gives you the stability you need to scale gracefully without the worry of costly accidents putting you out of business.
Never underestimate the power of that stability. Follow our tips above, be honest with yourself about your company’s needs and always look to procure a quality worker’s compensation policy that gives you, your business and its employees the protection you all deserve.
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