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How to Choose Workers’ Compensation Insurance: Everything to Know

Employers report nearly 3 million workplace injuries every year. Fortunately, they’re on the decline, and most employers have the foresight to purchase workers’ compensation insurance. Still, how do you know how to choose the right workers’ comp insurance for your company?

Keep reading to learn more about how to choose workers’ compensation insurance.

Do You Need Workers’ Comp Insurance?

If you’re asking this question, you most likely have employees. If so, it’s quite possible you need workers’ compensation insurance.

About one in five small businesses must carry workers’ comp. However, finding the right workers’ compensation insurance can prove confusing. Furthermore, many insurers don’t want to deal with small business policies.

With the right tips, however, you can find workers’ comp insurance the smart way. Let’s look at a few things you should do when shopping for workers’ compensation insurance.

Always Ask About Discounts

You can’t control the calculation of your premium. It’s established by several things, including:

  • Available insurance
    • Business class codes
    • Workers’ comp rates

Still, there are ways you can save when shopping for a policy. For instance, you could receive a discount if you maintain a formal safety program. If you need to create a program, the Small Business Safety and Health Handbook is a good place to start.

With this in mind, you might want to consider a structured safety training program for new hires. With this kind of training in place, you could receive a discount on your policy.

Invest in the Right Kind of Insurance

Insurers base workers’ compensation insurance rates on classification codes. This is a numeric system that standardizes employee work.

Each classification code has an assigned rate. The rate correlates with the likelihood of injury and risk.

With this in mind, you’ll base the coverage you need on your payroll. For instance, you might pay $40,000 a year to an administrative assistant and $150,000 a year to an internal accounting team. In that case, you’d base your coverage needs on these payroll amounts—more on this in a moment.

Know the Rules

Each state regulates workers’ compensation laws. As a business owner, it’s essential to understand insurance state requirements.

State laws will dictate where you can shop for a workers’ compensation insurance policy. They’ll also determine which employees you must cover.

You must comply with insurance state requirements concerning workers’ compensation. If you perform services in multiple states, you may want to consider an “all states” endorsement for your workers’ compensation insurance policy.

Payroll and Workers’ Comp Insurance

Currently, it’s possible that you’re experiencing the growth or contraction of your business. In either case, it’s not likely that your payroll will remain the same over the next year.

Also, you most likely have various payroll processes for different kinds of employees. For instance, you might have different processes for:

  • Employee Family members
    • Full-time staff
    • Hourly workers
    • Part-time staff
    • Temp workers

When purchasing workers’ comp insurance, you must estimate your yearly payroll based on these groups. You’ll then audit your payroll at the end of the year for insurance purposes. At that time, your insurer will issue a bill or credit based on your circumstances.

Review Your Existing Workers’ Comp Coverage

You may already have workers’ comp insurance. In that case, you’ll want to examine your existing policy.

This is especially vital if you’re shopping for new coverage. Potential insurers will most likely ask you for information about your current policy.

There are a few pieces of information, in particular, you should look up. This information includes:

  • Class code
    • Experience modifier
    • Loss runs

Having this insurance information available will make the process of evaluating an underwriter go faster. It will also help you secure the policy you need quickly.

Workers’ Compensation Insurance for Contractors

If your company contracts with other businesses, workers’ compensation insurance is an important growth tool. You must have coverage and services that address your unique risks. The right insurance policy can give you a competitive edge.

A good workers’ compensation insurance policy can tip the advantage in your favor when a prospective client is awarding contracts. Alternatively, it could show potential investors that your company is a good risk. An excellent workers’ comp policy can also show stakeholders that you can contain medical costs.

The following are a few benefits contractors should look for when choosing an insurer.

Blanket Waivers

Some clients may require a blanket waiver of subrogation before entering a contract. This document waives your right of recovery if one of your employees gets hurt performing work on their site. Without this waiver, your client could expose themselves to liability.

This isn’t a feature that you want to place in your policy for all clients. However, it’s important to work with an insurer who’ll provide this service if the need arises.

Endorsement of Alternate Employer Coverage

Your customers might also require an endorsement of alternate employer coverage. For instance, you may loan or lease your employee to a client.

In that case, this endorsement will apply to your workers’ comp and employers’ liability coverage. It will work as if your customer has insurance under your policy for those loaned or leased employees. As a result, your insurer will not ask your clients’ insurer to share losses in the event of a worker injury.

Industrial Hygiene Analysis

It’s also helpful to look for an insurer that works with a nationally accredited industrial hygiene laboratory. Imagine that one of your staff develops respiratory problems.

An analysis by an accredited laboratory will help you pinpoint the cause. The analysis will also help you take corrective action.

With this in mind, you should look for an insurer that can guide your company. They should have extensive capabilities and experience in industrial hygiene and workplace safety.

It’s helpful to look for a company that works with a laboratory accredited by the American Industrial Hygiene Association. This endorsement proves the insurer understands industrial hygiene trends. It also shows that an insurer can evaluate and improve your employees’ occupational health.

Medical Cost Containment

Contractors must also consider a medical cost containment strategy. For example, your workers’ comp costs may have increased considerably. Yet, the volume and type of injuries have not changed.

In this instance, some small businesses might think medical providers have billed incorrectly. With this in mind, it’s helpful to look for an insurer that has systems and resources that can help you to save on health costs.

For example, ask potential insurers if they have a medical audit and review team. This service can provide you with a much more detailed review of medical bills compared to an automated system. It can also help you save on medical costs.

Online Resources

As a contractor, a workplace injury can raise questions about treatment for injured workers. You need an efficient and straightforward process for finding answers.

Employees also need an easy way to seek medical advice and get answers to questions. With this kind of technology, you can get transparent answers about the workers’ compensation claims process.


With this in mind, it’s good practice to work with a workers’ comp insurance provider that’s familiar with your field. They can help to protect your business before, during, and after a claim.

At some point, your company may grow. It will face increasingly complex compensation claims.

If this occurs, you’ll need an insurer that has solid expertise in business risk in your field. An experienced broker can help you to find the best underwriter to work with your company.

Choosing an Insurer

Again, most employers must have workers’ compensation insurance for employees. At first, choosing the right policy may seem straightforward.

However, you’ll see that you have a lot to consider once you dive into the process. More importantly, your workers’ comp insurance can impact the future of your business.

Workers’ compensation insurance shields both employees and employers from losses. It works alongside other insurances, like general liability insurance, to protect your company from damages. For instance, it pays for medical treatment for injured workers.

It also provides employees with reimbursement for lost wages. In turn, it’s less likely that an employee will sue you because of work-related injuries.

Let’s go over a few things you should consider when choosing a workers’ comp insurer.

Assessing Customer Service

Don’t wait until you need to file a claim to research whether your provider is easy to access. If you have questions about claims, premiums, or workplace safety, you want to know that you can contact your insurer. In part, it helps to check out a potential insurer’s digital services.

As a business leader, your schedule is most likely full. You don’t have a lot of time to manage day-to-day workers’ comp issues.

With this in mind, you should look for an insurer with a good customer service portal. You want online tools that can help you to pay your premiums.

You also want a straightforward way to report injuries and manage claims online. You should also look for an insurer that allows you to view reports, such as audit statements and loss runs.

Claims Management

Unfortunately, workplace injuries sometimes occur. When they do, successfully managing your claim will result in the best outcome for your employee and your company.

Effective claims management can provide positive benefits. For instance, it can positively impact your experience modifier. It can also reduce your premium.

It helps to understand that insurers aren’t trying to avoid claims. They want your company to succeed.

With this in mind, ask a potential insurer what processes they have in place to ensure employees receive care quickly. A good insurer will also have resources to help you plan your employee’s return to the job.

Workers’ Comp Specialization

Large insurance companies often offer other products besides workers’ comp insurance. In many cases, an agent might suggest that you purchase all your policies from one insurer.

This practice streamlines your insurer selection and policy administration. However, it doesn’t necessarily provide the most value for your premium payments.

In some cases, it’s more beneficial to work with a company that specializes in workers’ comp insurance. A specialized workers’ comp insurance provider understands local laws deeply. They can better prepare you to avoid liability and the potential costs related to workplace accidents.

Safety Support and Resources

You should also seek an insurer that shares your interest in keeping your employees safe. They should work with you to prevent injuries rather than solely manage the outfall of unsafe work practices and conditions.

With this in mind, look for an insurer with an extensive library of safety resources. In this way, you won’t have to develop a safety program from the ground up. You can use your insurer’s resources to learn the latest best practices for your industry.

Get Expert Help

By working with an experienced workers’ compensation agent, you can ensure that you choose the right coverage for workplace injuries.

An experienced broker has a wealth of knowledge. They’ll serve as a huge asset to your company. For example, they can help you when comparing insurance costs.

This expertise is especially beneficial for small businesses. Many small firms don’t have a dedicated risk manager on staff. You can receive the benefits of a dedicated risk manager by working with an experienced broker.

It helps to start the conversation with a broker by knowing your needs. For example, you may want to reduce your premiums by preventing injuries and improving your experience modification factor.

Alternatively, you may want to manage workers’ compensation claims effectively. In either case, a genuine partnership with an experienced broker that specializes in workers’ comp insurance can help you meet these goals.

Luckily, we know the perfect broker for your needs.

A Trusted Broker for Your Insurance Needs

We hope you now have a better understanding of how to choose the right workers’ compensation insurance. Still, there’s no need for you to do all the hard work of finding the right business insurance on your own. One Force Worker’s Comp is here to help.

We’re the worker’s comp experts you can trust. Please feel free to contact One Force Worker’s Comp today for a fast quote.

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