If you want to run a business with employees, you probably need to have workers’ compensation insurance. However, just because it’s something you need to have doesn’t mean that it isn’t a cost you can control. Keep reading to learn more.
Can You Skip Workers Compensation Coverage?
If you have three or more employees in Wisconsin, you have to carry workers’ compensation coverage by law. If you have employees in any other state, you have to follow that state’s laws.
Who Sets Workers Compensation Rates?
Workers’ compensation rates are the same from all providers. The Wisconsin Compensation Rating Bureau fixes workers’ compensation rates by law.
Are Rates the Same for All Workers?
Workers’ compensation rates vary by industry and job type. Rates are higher for more dangerous industries. Rates are also higher for more hazardous jobs within a specific industry. For this reason, it’s essential to make sure you’re using the right classification codes.
For example, you might have used to manufacture your goods in-house and sold them in a storefront. Over time, you may have made a deal with another manufacturer to produce your goods for you and become a retail store solely. If you never updated your worker’s compensation industry, you may be paying a much higher rate for being a manufacturer.
Another example is a landscaping company. This is generally a dangerous job and comes with high rates. But you might also have a receptionist or bookkeeper that only does office work and never goes to customer sites or handles the yard equipment. If you didn’t make sure to classify those safer positions separately, you could be paying too much for those workers.
Does Your Claims History Matter?
Just like any other insurance, workers’ compensation rates depend on your claims history. You start with the base rates that are set by law. You then increase or decrease them by your experience modification rate.
The experience modification rate is pretty simple. You multiply it by the base rate for your actual rate. If you have an average number of claims, it’s equal to 1.0, and your rate doesn’t change. If you have more claims, your mod increases, and so does your rate. If you have fewer claims, your mod falls below 1.0, and you receive a lower rate.
What Can You Do to Reduce Your Claims?
The number one thing you can do as an employer to reduce your claims and workers’ compensation rates is to promote safety. Many workplace injuries happen because workers skip safety steps when put under time pressure or skip doing things strictly by-the-book because they don’t understand the importance of doing so. Proper training, along with the equipment workers need to follow that training, can significantly reduce the number of claims you have.
To learn more about how to improve safety in your workplace, talk to innovante insurance. Contact us now to learn more.
