If you have ever run a business then you have dealtwith work comp insurers. Battling with the constant threat of increased rates will make any business owner paranoid.
Chances are you already realize that there are things that occur in your business that can cause the work comp insurance companies to raise your premiums. Other reasons you may not realize are that there are also frequent mistakes made by the carrier that have a detrimental effect on your business. The following is a list of frequent mistakes by companies and workers comp insurance companies.
The following are some frequent mistakes made by employers that cause workers comp premiums to go up:
* No safety program for preventing injuries
* Non-existent return to work plan
* Not reporting injuries to the insurance company when they occur
* Lack of communication with the injured worker’s doctor
The preceding are only a sampling of the frequent mistakes that employers make when dealing with workers comp. There are many things available that will help you to reduce premiums with minimal upfront costs. If not watched the considerations above can amount to thousands of dollars in higher rates.
The next list below are frequent mistakes made by workers comp insurance companies:
* Workers given the wrong work comp class code
* Business’ experience modification was calculated using the wrong information
* Eligible credits and exemptions never applied
* Errors with payroll calculations
Make no mistake, these errors are only a small sample of the dozens of mistakes that come up. A frequent error is when the workers comp insurance company is calculating the overtime rate at the amount on the payroll as opposed to a straight hourly rate.
Another problem is employees being put into the wrong work comp class category. This error can cost employers thousands of dollars. One example is a clerical worker being mis-classified under the construction code because she has to go to the job site on an occasional basis.
If you have ever dealt with carriers you probably know how difficult it can be to get your company’s premiums lowered. Even though you may be right, you may not have the tools you need to show them the error so that the error can be made right. Then there’s the mistakes that you don’t know about that are costing your business money. Errors that amount to tens of thousands of dollars over time.
Take it from me, I’ve seen it. I recently saw a policy that had so many mistakes that the company was refunded $96,000. Basically, the employer received back $16,000 a year foreach of the six years past. I don’t know about you but I could definitely use an extra $96,000.
You probably think I am making this up but you would be wrong. It is not even the largest refund that I have seen. On average we see about $37K dollars in refunds. Naturally it all depends on what your company is paying in premium rates but typically we usually recover about 10% of the annual premium rate.
Don’t take my word for it, try it out yourself and see.
You can read more about it at: Workman’s Comp Insurance Companies
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