How To Keep Workers' Comp Rates Down
For contractors across many classes of business, workers’ comp tends to be the most expensive line of business in their insurance coverage. This being the case, keeping the premiums low is something that every business owner wants to achieve.
What Affects A Workers’ Comp Premium?
- The type of work that the business is involved with
- Payroll and Number of Employees
- The State that the business is in
- Number of claims
Of the four determining factors above that affect workers’ comp cost, two of them are out of the business’s control. However, keeping control of the two that we can get involved with can lead to lower comp rates:
- Keep a detailed and organized log of projects and payroll records
- Have documented safety procedures in place and safety training / meetings for employees.
Keeping detailed track of projects can help to lower the cost of workers’ comp coverage. A lot of contractors just put their business down as 100% construction. The problem here is that construction carries one of the highest premiums for workers’ comp coverage. If the business owner also takes jobs in other areas like plumbing or HVAC maintenance, the premiums could be lower depending on the state than if they just throw down 100% construction.
Staying as safe as possible at a job site is a no-brainer. Also, the fewer claims there are for accidents and injuries, the lower a workers’ comp premium is going to be. Taking preventative measures like drug testing, employee training, having documented safety guidelines, and employee safety and health meetings are efficient ways to mitigate danger at the job sites.
There are many factors business owners cannot change on a whim, like the type of work the business does and the state that it operates in. However, by taking control and effectively managing the aspects that are controllable, like keeping detailed books on projects and payroll and taking extra strides in training and job site safety, workers’ comp costs can be kept in a reasonable range and be prevented from rising drastically.
For more information on workers’ compensation insurance, visit NIP Programs.