As a business owner, worker's compensation insurance is one of those things that you probably know that you need to have but you don't fully understand. For many business owners, worker's compensation insurance is somewhat of a mystery and they just accept the first policy that they can find. If you're in the market for worker's compensation insurance, it's important to understand what affects your premiums as well as how you can save money on the policy. Here's a look at a few of the things that you need to know.
Classification Codes Matter
When it comes to worker's compensation insurance, classification codes are an essential part of determining your premiums. First, you'll want to be sure that your business is assigned the right classification code based on your industry and the type of work that you do. Talk with your worker's compensation insurance agent about what your business is and provide as much detail as possible. This is important because manufacturing and industrial jobs will have much higher risk factors than a bookkeeping office or something similar.
Additionally, not only is your business assigned a classification code, but each of your employees will be as well. Employee classification codes are dependent upon the type of job that they perform and the level of risk associated with that job. Make sure that you list each employee's position correctly. This helps to ensure that you get the low-risk classification rate for every eligible employee.
Safety Efforts Are Important
Another factor to consider when it comes to your worker's compensation insurance is the safety efforts that your business takes. Make sure that you have solid safety plans in place and contingencies for injury responses. The better prepared and protected your employees are, the less risk there is of losses. When you can show sound safety efforts, this can save you in worker's compensation premiums.
Your Claim History Matters
If you're new to the business industry and just securing your first worker's compensation policy, claims history isn't necessarily relevant, but for established businesses, your worker's compensation claims will directly affect what you pay for worker's compensation insurance premiums in the future.
Your policy premiums will be adjusted based on the number of claims you've filed as well as the total settlement value of those claims. That's why it's in your best interest to ensure that your employees practice the necessary safety standards to minimize the risk of injuries and illnesses caused on the job.
Talk with services like Contractors Insurance for more information and to get a quote for your business.