Understanding Workers Compensation Insurance, let alone business insurance in general, is not as easy as it seems. As business Insurance Agents we have to go through an ungodly amount of schooling to learn what seems to be like a whole new language comprised of risk, indemnity, mitigation, subrogation and loss. To expect the Joe average business owner to know and understand these new Greek terms from the start is out of the question. One term however that they should know is Workers Compensation Insurance. I get questions all the time about what it is and how to get the best quotes for small business workers compensation insurance. It is good to understand that as a business owner you do have options for your work comp insurance and that not all insurance companies offer the same old insurance options that frankly, might not be the most cost effective one for you.
We should first start by understanding what workers comp insurance covers. Work comp is designed to offer payment for injury caused in the scope of employment which provides benefits to a worker or the worker's dependents for injury, disability, or disease contracted by the worker in the course of his or her employment. So for instance if a small business owner has a general contracting firm that has a worker injure himself while working on a roof, the workers compensation insurance would pay for medical bills and loss of wages associated with that accident. The process that is required in order for your insurance agency to provide you with these insurance quotes is a relatively quick and usually painless one. First your insurance agent will gather some basic information on your company. He or she might ask for your specific operations, number of employees, hourly wage each employee makes along with your companies federal tax ID number used for tracking the quotes. Now that he has that information, a quick understanding of workers compensation insurance types is needed.
An annual workers compensation insurance policy is the first type. Most small businesses have an annual workers compensation insurance policy. They way this works is after your agent gets several quotes the annual policy will have a total estimated premium for the year which was calculated using the original figures that you gave your broker. Annual policies usually have a couple different payment options like payment in full and of course allowing for some sort of down payment with set monthly payments after. The businesses that do not have much sway in their annual payroll amount are usually best suited for this type of policy since the end of the year audit can be quite costly if you underestimated your payroll at the beginning.
The pay as you go workers compensation insurance policies are pretty rare but a great choice for certain businesses. These policies usually do not require much on the down payment if anything at all and then allow you the owner to pay monthly for only the amount of insurance that you actually need based on actual payroll figures. Contractors love this type of workers compensation insurance since their business fluctuates from one month to the next and often with the seasons to having to make a good estimate is not really needed.
PEO which is a Professional Employers Organization, are a third option that some small businesses prefer. These work comp insurance companies will most of the time only provide insurance to insured that opt to use their integrated payroll servicing services. This pretty much means that you can not do payroll with your own office or third party payroll service which in the end locks you into their services.
Taking the first workers compensation insurance policy that is offered for your particular business is usually not the best choice. Just by taking a moment to ask your insurance agent what other work comp policy options there are for you could save you hundreds or thousands in just deposits alone. Insurance carriers are constantly trying to modify their services in order to offer a wider range of choices to their clients. Know and understand these options so that your workers compensation insurance works for you.
We should first start by understanding what workers comp insurance covers. Work comp is designed to offer payment for injury caused in the scope of employment which provides benefits to a worker or the worker's dependents for injury, disability, or disease contracted by the worker in the course of his or her employment. So for instance if a small business owner has a general contracting firm that has a worker injure himself while working on a roof, the workers compensation insurance would pay for medical bills and loss of wages associated with that accident. The process that is required in order for your insurance agency to provide you with these insurance quotes is a relatively quick and usually painless one. First your insurance agent will gather some basic information on your company. He or she might ask for your specific operations, number of employees, hourly wage each employee makes along with your companies federal tax ID number used for tracking the quotes. Now that he has that information, a quick understanding of workers compensation insurance types is needed.
An annual workers compensation insurance policy is the first type. Most small businesses have an annual workers compensation insurance policy. They way this works is after your agent gets several quotes the annual policy will have a total estimated premium for the year which was calculated using the original figures that you gave your broker. Annual policies usually have a couple different payment options like payment in full and of course allowing for some sort of down payment with set monthly payments after. The businesses that do not have much sway in their annual payroll amount are usually best suited for this type of policy since the end of the year audit can be quite costly if you underestimated your payroll at the beginning.
The pay as you go workers compensation insurance policies are pretty rare but a great choice for certain businesses. These policies usually do not require much on the down payment if anything at all and then allow you the owner to pay monthly for only the amount of insurance that you actually need based on actual payroll figures. Contractors love this type of workers compensation insurance since their business fluctuates from one month to the next and often with the seasons to having to make a good estimate is not really needed.
PEO which is a Professional Employers Organization, are a third option that some small businesses prefer. These work comp insurance companies will most of the time only provide insurance to insured that opt to use their integrated payroll servicing services. This pretty much means that you can not do payroll with your own office or third party payroll service which in the end locks you into their services.
Taking the first workers compensation insurance policy that is offered for your particular business is usually not the best choice. Just by taking a moment to ask your insurance agent what other work comp policy options there are for you could save you hundreds or thousands in just deposits alone. Insurance carriers are constantly trying to modify their services in order to offer a wider range of choices to their clients. Know and understand these options so that your workers compensation insurance works for you.
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Understanding the many types of Worker Compensation Insurance if very important. Please see our site for additional information on Worker Compensation Insurance
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