How to Choose Between Workers Compensation Insurance Carriers

October 6, 2022

By: 

The Normandy Team
How to Choose Between Workers Compensation Insurance Carriers

Workers' compensation insurance is a staple business insurance coverage your business should have. This coverage ensures you have enough coverage in the event of a workplace injury or illness. Fortunately and unfortunately, there are several different workers' compensation insurance carriers for you to choose from.

So how do you sort through these carriers to find the right one for the needs of your business? Continue reading below to learn more about what to look for when shopping for the best workers' compensation insurer and who you can contact for additional guidance.

What Is Workers’ Compensation Insurance?

Workers' compensation insurance, also known as workmans' compensation or workers' comp, is an insurance coverage that covers employees who sustained an injury or an illness while on the job. The coverage pays for medical expenses and lost wages caused by the injury. Not every state requires businesses to carry this type of insurance, but it is recommended that you do so even if you aren't required to.

If your employee gets hurt, you want to ensure that you have coverage to pay for their injuries and lost wages. If you don't, there is a chance that the employee could sue you. This will cost you more than the average workers' compensation insurance policy.

What Does Workers’ Comp Cover?

In addition to paying for your employee's medical bills and lost wages, workers' comp covers other situations. If your employee passes away due to a work-related injury, your policy will pay out a death benefit. The death benefit will pay for the employee's funeral expenses in addition to paying a benefit to help support the survivors of the deceased.

Work Injury Lawsuits

Most workers' comp policies include employer's liability insurance. This coverage protects you, the employer, from lawsuits that claim you acted in negligence. In the event that your employee sues you, your policy will take care of any associated attorney's fees, settlements, and court costs.

What Is Not Covered?

Workers' compensation does not cover any injuries or illnesses caused while the employee is under the influence of drugs or alcohol. If your employee violated a company policy that resulted in their injury, workers' compensation insurance would not cover those injuries.

Other instances where workers' comp won't cover injuries or illnesses:

  • OSHA fines
  • Independent contractor injuries
  • Injuries claimed after being laid off or fired

Make sure you thoroughly read through your policy's exemptions before you purchase your policy. It would be best if you also let your employees know about these exemptions as well to ensure they are aware of the rules.

Check the Workers’ Compensation Insurance Carriers’ Financials

When choosing the right workers' comp insurance carriers for your business, you want to make sure they have solid financials. It may be tempting to reach out to someone who can offer you a cheap rate, but make sure you do your due diligence and research the company. If you read any concerns about a company that does not pay out on their claims, you may want to look into a different carrier.

Workers' Comp Insurance Carriers Experience

It is very important to note that not all insurance carriers offer workers' compensation insurance. When choosing the right carrier, you want to ensure they have experience and expertise in workers' comp. Not only does working with a carrier who specializes in workers' comp guarantee that they can get you the best policy possible, but they can also provide you the most value for your premium.

Workers' Comp Resources

Most reputable workers' comp insurance carriers have access to safety resources and support to help keep you and your employees safe at work. After all, the main point behind having workers' compensation insurance is to ensure a safety net in the event your employees get hurt. To reduce those chances of injury, you should have proper resources and safety measures in place.

Safety Reward Programs

Speaking of safety measures, did you know that some workers' comp carriers reward their clients for being safe? Your insurer can reward you with additional discounts when you show that safety is your top priority by ensuring a safe working environment or by having minimal claims. This means you can expect lower premiums as long as you continue to do your part in keeping the work environment safe.

Excellent Customer Service and Claims Management Support

Filing a workers' comp claim is something no employer wishes they should have to do, but it happens. When it happens, you want to make sure you can depend on your insurer to handle the claims process promptly. A reputable company should have resources to help you get through the claims process and get your employee back to work.

Return to Work Coordinator

To ensure you get the most out of your policy, you should look for an insurer with a dedicated return to work coordinator. If your employee's injury forces them to take time off, your return to work coordinator can help plan for their return to work.

This could include light-duty work or transitional work. Creating a plan to get your employee back to work helps your business and ensures a safe return for your valued employee.

Flexible Payment Options

Paying for workers' comp insurance can cause a burden for some small business owners, and most reputable workers' comp carriers know about this. There are some carriers who provide their clients with flexibility in how they pay for their premiums.

Available options for flexible payments:

  • Monthly billing
  • Quarterly billing
  • Annual billing
  • Pay-as-you-go plans

There are some carriers who also provide you discounts for bundling workers' compensation coverage with other small business insurance policies such as general liability and more.

If you need help paying for your coverage, it is best to reach out to your insurer for more help instead of opting out of the policy in general. Again, as mentioned above, lawsuits cost more than the average premium for workers' compensation.

How to Find the Right Carrier

Now that you know a bit more about what to look for when shopping around for carriers, there are a few more things you should be aware of. For example, when comparing providers, be sure to take a look at their reviews. You can use websites that can't alter reviews, such as Google and the Better Business Bureau.

Check to see what other clients did or did not like about working with a particular carrier. Pay close attention to comments about the claims process and how long it took to resolve those claims.

Compare Costs

It is important to note that no two carriers are the same. Each workers' comp insurer has its own underwriting process. Be sure to receive several quotes to compare before making your final decision.

How Are Workers’ Comp Insurance Costs Determined?

As mentioned earlier, each carrier has its own underwriting process that they use to rate your policy. In general, most carriers rate policies based on the number of employees you have and their job classifications. Jobs involving hazardous waste or high risk, such as construction, have a higher risk rating than those working in an office.

Another factor most workers' compensation insurance carriers take into consideration is the experience modifier of your business. The experience modifier, also known as your MOD, is a numeric representation of your claim's experience.

If you are a newer business, you most likely have a lower experience MOD than another company that has been in business for four years.

It isn't uncommon for newer businesses to have higher premiums than those who have been in business because there is no data to go off of. As your business grows and as you continue to have a safe environment, you can expect lower rates when it comes time to renew your policy.

Affordable and Reputable Workers’ Compensation Coverage

As a business owner, you want to ensure that your business and your valuable employees have enough coverage in case of a workplace illness or injury. The last thing you want is to be on the hook for your employees' medical bills and lost wages.

There are several different workers' compensation insurance carriers that you can choose from, and finding the right one can be overwhelming. Choosing the right workers' compensation insurer should not be hard, especially if you know what to look for.

If you are ready to find out how much you can save on your workers' compensation insurance policy, contact us for a free no-obligation quote.

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