Most states require that employers take on worker's compensation insurance coverage for their employees. But that doesn't mean you have to pay more than you have to for your coverage.
There are ways to cut down your worker's compensation insurance premium while still meeting the state requirements. Here are a few tips to help you strike a balance between getting the best coverage and keeping your premiums low.
Create a Return-to-Work Program
A return-to-work program can lower your worker's compensation insurance costs by helping injured employees return to work sooner. The longer an employee takes before they resume work, the high the amount of their worker's compensation claim. By returning to work sooner, an employee can help reduce the overall cost of their claim.
In addition, you can customize your return-to-work program to meet the needs of your company and your employees. For instance, you could allow an injured employee to resume work in a limited capacity. Depending on the nature of your work, you could also allow employees to work from home after a serious injury.
Pro tip: Employees who feel supported by their employer are more likely to stay with the company, saving on the cost of recruiting and training new employees.
Review Employee Classification
As a business owner, your worker's compensation insurance policy is a necessary cost of doing business. But what you may not realize is that your premiums can be affected by the classification of your employees. By reviewing your employee classification, you can ensure that each worker is classified correctly and that you are not paying more than you need to.
Your premiums are based on the type of work your employees do and the risk associated with that work. For example, office workers are typically classified as low risk, while factory workers are classified as high risk. The higher the risk, the higher your insurance premium.
Without proper classification, you may be paying too much for your worker's compensation insurance. If you have employees who work in a low-risk environment but are classified as high-risk workers, you may be overpaying for your coverage. For example, if you have a primarily office-based employee, there is no need to pay for coverage that would apply to a manual labor position.
By ensuring that your employees are correctly classified, you can prove to your insurer that your business is a low-risk proposition. As a result, you may be able to secure more favorable rates on your workers' compensation insurance. Contact an insurance provider such as Contractors Insurance for more information.