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.
Let us start by understanding exactly what workers comp insurance covers. Workmans compensation insurance is made to offer payment for injury caused in the scope of employment which provides benefits to a worker or the workers dependents for injury, disability, or disease contracted by the worker in the course of his or her employment. For instance if a commercial business owner has a general contracting business that has a employee injure himself while working on a roof, the work comp insurance would pay for medical bills and loss of wages associated with that accident. The process that is needed for your insurance broker to provide you with the best insurance quotes is a relatively quick and mostly painless one. To start your insurance broker might gather some basic info on your business. He or she might ask for your specific operations, number of employees, hourly wage each employee makes along with your business federal tax number that he or she will use for tracking the quotes. Now that he has all of the information needed a quick understanding of the types of workers compensation insurance is required.
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.
If you end of taking the first workers compensation insurance policy that is offered to you then you might be in for a big headache. You should take a little while to look around and figure out if there are any other options that might better suite your particular needs or might save you a ton of money in the long run. Each business has a set of particular needs that insurance carriers are always trying to fulfill and so there are many options to choose from. Ask your agent as many questions as you can to get to know what options you have and which will be best for your workers compensation insurance needs.
Let us start by understanding exactly what workers comp insurance covers. Workmans compensation insurance is made to offer payment for injury caused in the scope of employment which provides benefits to a worker or the workers dependents for injury, disability, or disease contracted by the worker in the course of his or her employment. For instance if a commercial business owner has a general contracting business that has a employee injure himself while working on a roof, the work comp insurance would pay for medical bills and loss of wages associated with that accident. The process that is needed for your insurance broker to provide you with the best insurance quotes is a relatively quick and mostly painless one. To start your insurance broker might gather some basic info on your business. He or she might ask for your specific operations, number of employees, hourly wage each employee makes along with your business federal tax number that he or she will use for tracking the quotes. Now that he has all of the information needed a quick understanding of the types of workers compensation insurance is required.
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.
If you end of taking the first workers compensation insurance policy that is offered to you then you might be in for a big headache. You should take a little while to look around and figure out if there are any other options that might better suite your particular needs or might save you a ton of money in the long run. Each business has a set of particular needs that insurance carriers are always trying to fulfill and so there are many options to choose from. Ask your agent as many questions as you can to get to know what options you have and which will be best for your workers compensation insurance needs.
About the Author:
Understanding the many types of Worker Compensation Insurance if extremely important. Please visit our site for additional information on Worker Compensation Insurance
No comments:
Post a Comment