workers comp Archives

Commercial Insurance for Startups

You’re not starting any ordinary small business. You’re building a startup. Your goal is to grow and, in order to do this, you not only need a solid business plan, but also protection for everything that you’re building. Startups are inherently risky, so it is extremely important that you get the right commercial insurance coverage.

Insurance for the First Stages

If you’re in the first, or seed, stage of building your startup you are probably excited – and nervous about everything that’s to come. Maybe you’re not thinking about insurance, or think that it’s something that can wait until you’re further along in the process. Nothing could be further from the truth.

Startups are all about investment, and you need to think of commercial insurance as another investment to grow your business. Without it, you won’t be able to attract the best employees or convince investors that you are serious about your venture and are planning ahead for the long run. Even before you have customers, you should have the following policies:

General Liability – something that all businesses should have, this type of insurance protects you against lawsuits claiming bodily injury or property damage. But did you know it also provides coverage for personal and advertising injury like libel or slander?

Commercial Property – if you’ve got office space, then you need this type of policy to protect everything in it from risks such as fire or theft. There are commercial insurance packages available that will bundle liability and property coverage.
Workers Comp – if your startup has or plans on having employees, be aware that this type of coverage is required by individual states. It covers medical expenses and lost wages for an employee who is injured at work.

Tech E&O vs Cyber Liability

Once you’re past that first stage of getting your initial funding, setting up your space, and hiring your employees, it’s time to start thinking about what happens once you are up and running. Now you have customers, and a whole new set of risks.

The above type of insurance policies apply to all businesses, but you may need some specialized coverage for your startup. If you’re dealing with any kind of tech, as many startups do, there are two types of policies you should look into: tech errors & omissions (E&O) and cyber liability insurance. They may sound similar, but they cover different things.

Tech E&O – If you’re a business selling a physical product, then you need product liability in case a product fails. If you’re a firm offering financial or legal advice, then you need errors & omissions to protect yourself against claims of financial damage. If you’re a tech startup, then you need tech E&O. This type of coverage protects your company in the event that one of your tech-based products fails. If you are developing or licensing software, it is important to note that the insurance industry considers software a service and not a product. Because of this, you will need tech E&O, and not the same type of product liability coverage that might be sufficient for other businesses.
Cyber Liability – There is one very important thing that that tech E&O doesn’t cover: third-party data breaches. 43% of all cyber attacks happen to small businesses. With all the risks of cyber crime today, this type of insurance is essential if you store any kind of customer data.

While tech E&O covers the failure of software, cyber liability covers the loss of private third-party information. Depending on your startup, you may need both to be fully covered.

As You Grow

If your startup is taking off, congratulations! You’re growing, and are probably looking for more investment and taking on a board of directors. In this case, you’ll need another specialized type of coverage: Directors & Officers insurance.

This type of insurance covers both your business and your management, including their personal assets. It covers:

Theft of trade secrets

Misrepresentation, in the case that investors feel they were given
misleading information, leading to loss
Wrongful acts, covering anything that managers do in their professional capacity that stakeholders deem “wrongful,” and that results in a loss

Having D&O is important for attracting investors, who will feel more confident placing their trust (and money!) with you if you have comprehensive coverage. Your board members/managers will also feel confident making decisions without risk of personal liability.

Startups are unique among small businesses. They’re riskier, but they have more potential for growth. If you’re one of the few who have the vision and the drive, make sure that you protect everything you’re building. And remember, EZ.Insure is here to help you sort out your commercial insurance needs. We’re unique, too! We want your startup to succeed and will work with you to keep you covered. Our services are always free and nobody will ever hound you with endless calls. You have enough to worry about! To get started simply enter your zip code in the bar above, or you can speak to an agent by calling (855) 694-0047.

Workers’ Compensation Insurance Vs. Disability Insurance

Workers’ compensation and disability insurance are similar policies, but workers’ compensation covers both the company and the employee from injuries and illnesses that happen at work. While disability insurance covers an employee for medical problems that happen outside of work. Workers’ compensation insurance and disability both help workers who are sick or hurt and can’t work to earn money. Workers’ compensation insurance is something that most states require companies with employees to have.

It pays for a worker’s medical bills if he or she gets sick or hurt at work. It can also help make up for a worker’s lost income if they can’t work for a while. Disability insurance replaces a person’s lost income if they are hurt or sick outside of work and can’t work because they are handicapped. Most of the time, this coverage is not required. However, some states, like California, have state disability programs that require all qualified workers to have coverage.

Workers’ Compensation Insurance

In most places, employers are required to have insurance for workers’ compensation. But if you don’t have insurance, you could be held responsible for paying for any accidents you get on the job. If you or a worker needs long-term care, these costs can be much higher than the cost of insurance. After getting hurt or sick at work, workers’ compensation can help in three important ways: it pays for medical costs for emergency or ongoing care, pays for lost wages while the person is recovering, and protects the employer from claims. When it’s required by state law, not having coverage can leave you open to serious fines from state regulators and legal action from your workers.

The boss also has other duties, such as telling workers what their legal rights are. This is done by putting up health and safety signs at work. Such as the name of the insurance company and how to report an accident. If a worker gets hurt on the job, the boss generally has to give them a claim form within 24 hours of finding out about it. Find out more about cases for workers’ comp.

Benefits of Workers’ Compensation

Salary Replacement

Most of the time, someone who applies for workers’ compensation will get some of their lost pay back. But it won’t be as much as their full pay. Most policies cover about two-thirds of the gross pay of the recipient. Even though the payout is usually not taxed at the federal or state level. People who get money from Social Security Disability or Supplemental Security Income may have to pay taxes on that money, though.

Medical Bills

Workers’ compensation insurance also covers the cost of medical care for a worker who gets sick or hurt on the job. This could mean going to the hospital, having surgery, or taking medicine. If you get sick or hurt at work and it’s so bad that you need more than one treatment. Workers’ compensation will pay for that care. It will also cover accidents that come from doing the same thing over and over again. It’s important to know that most workers’ compensation plans will only pay for medical costs related to injuries that happened at work. For example, a building worker could get paid for injuries they got when they fell from scaffolding, but not for injuries they got on the way to work.

Survivor Benefits

If your employee dies because of something that happened at work, workers’ compensation can help pay for their funeral and give widow benefits to their family.

Disability Insurance

Disability insurance is different from workers’ compensation in many ways. In this case, an employee’s illness or injury that keeps them out of work doesn’t have to happen at work. Depending on the claim, the benefits may be paid for a few days, weeks or even for life. Disability insurance is generally split into two types: Wooden blocks showing 'Long Term' and 'Short Term' on a table.

Short-Term Disability Insurance – Benefits for short-term unemployment last from three to six months. Many employers give this coverage as part of a group insurance plan. The premiums can be paid by either the employer or the employees.
Long-Term Disability Insurance – Long-term disability gives disability benefits for more than one year and is for disabilities that last longer or are permanent. Most people buy this from an insurance company on their own. But some employers give it as an option that the employee can pay for through payroll deductions.

Disability insurance is generally not required by law like workers’ compensation. Many workers choose to add their own private plans to the disability insurance that their employers already pay. Depending on the person’s situation, these policies can work with government-funded social security disability as well. As an employer, you might offer disability benefits as a way to make your employees happier and keep them on your payroll. This is because with disability insurance, employees know that if something comes up in the future that makes it hard for them to work, they won’t be left on their own with no options.

Benefits of Disability Insurance

Flexibility

Most of the time, employers can choose a plan that works for both them and their workers. For example, an employer might choose a “guaranteed issue” plan. Which lets workers buy coverage no matter what their health is like right now. Disability insurance also comes with payment flexibility. The company, the employee, or a combination of the two can pay the premiums, either before or after taxes.

Lower tax deductible premiums

Most of the time, group prices are less than individual rates. As a business tax deduction, you can use company-paid insurance that was paid before taxes.

How They Help Employer’s and Employees

Workers’ compensation helps workers with more than just medical care and lost wages. It can also protect employers from having to pay for this kind of care out of their own pockets and keep them from getting sued at the same time.

When an employee accepts a workers’ compensation settlement. They give up the right to sue their company for an accident that is covered by the settlement. This keeps the company from having to pay for expensive lawsuits and lets employees get the help they need right away. Since a workers’ compensation claim can be processed much faster than a lawsuit. Even when it’s not required, many employers give disability coverage because it can be a cost-effective way to keep their employees from having to pay a lot of money because of an accident or illness.

Another thing to think about is that the benefits from workers’ compensation may not be enough for some people who make more money. In many places, workers’ compensation insurance can only replace a certain amount of lost income. So some employers and employees buy disability insurance to make sure they are financially safe.

When You Need Workers’ Compensation Insurance

Depending on the workers’ comp rules in your state, you may need workers’ comp coverage as soon as you hire your first employee. But some states set the bar a little higher. Some states require this coverage for independent contractors who work in jobs that are more dangerous, like construction. For example, California requires employers with one or more workers to provide this service to any regular worker in the state. Even if they work alone, roofers must have their own insurance. Businesses with five or more staff in Missouri are required to have workers’ comp. Independent workers, one-person businesses, and owner partnerships don’t have to pay.

Most states don’t require sole proprietors and contractors with no staff to get workers’ compensation insurance. But some states do for more dangerous jobs. No matter what you do for a living, this coverage may be needed to apply for some contracts. Some companies require their contractors to have their own workers’ compensation insurance. Because it lowers the company’s liability if a contractor gets hurt on the job. Many workers buy this insurance because it protects their money. If you are a sole proprietor or an independent contractor, your normal health insurance probably won’t cover you if you get sick or hurt at work. If you can’t work because of an accident, you can also recoup some of your lost pay through workers’ comp.

State-Specific Disability Plans

Employers are required to take part in state disability insurance plans in the following states:

California
Hawaii
New Jersey
New York
Rhode Island
Puerto Rico

How EZ Can Help

If you are in need of disability insurance for your employees or need commercial insurance to safeguard your business, EZ is available to provide assistance. Our agents collaborate with leading insurance firms around the country. To ensure the identification of optimal insurance coverage for both your business and its employees. Indeed, it is possible to get substantial cost savings amounting to hundreds of dollars annually by collaborating with your financial plan to choose the most optimal insurance coverage. If you require any further clarification, please do not hesitate to contact us at 855-694-0047.

Workers’ Comp vs. Occupational Accident Insurance

One of the most important concerns for both workers and businesses is the health and safety of their workforce. Workers’ compensation insurance and occupational accident insurance are two important insurance policies. They each come into play when it comes to the protection and safety of the workplace. In spite of the fact that both offer financial aid in the event of a workplace injury, there are substantial differences between them in terms of their structures, coverage, and the conditions under which they are applicable.

Workers Compensation

Companies that employ a minimum number of workers or employees who work a specific number of hours per week as defined by law are required to comply with the workers’ compensation requirement, which is a state-regulated requirement. The minimum number of employees varies from state to state. In some states, it means one or more employees, while in others, it means five or more. For more information on state-specific workers’ compensation requirements, visit the U.S. Department of Labor’s Worker’s Compensation page.

Workers’ compensation provides payments for wage loss, medical treatment and related expenditures, and rehabilitation for employees who sustain an injury on the job or who become ill as a result of elements that are present in their workplace environment. In addition, the insurance policy provides coverage for employer liability, which means that businesses are afforded some degree of protection in the event that an employee decides to file a lawsuit in connection with their workers’ compensation claim. More frequently than not, the costs of legal defense are covered up to the limitations of the policy. It is still the responsibility of employers to ensure that their employees are working in a safe environment.

Occupational Accident Insurance

Occupational accident insurance is a policy that provides benefits to independent contractors and employees who are not protected by a workers’ compensation program. This sort of insurance may give medical, disability, and accidental death and dismemberment benefits. But it is not state-regulated, unlike workers’ compensation. Wage loss benefits, medical expenditures, and rehabilitation costs for workers or insured independent contractors may be paid by policies, but only up to policy limits. Employers can determine their coverage and deductible amounts based on their own risk tolerance.

Workers’ compensation is more expensive for businesses, but it provides more complete coverage, particularly in terms of their own liability, which is not covered by occupational accident insurance. Employers who purchase occupational accident insurance may be exempt from the mandatory workers’ compensation system in several states. While the employer still has a legal commitment to employees who are injured or killed on the job, it is significantly less expensive than workers’ compensation. Employers receive statutory benefits through workers’ compensation, however when purchasing occupational accident insurance, you must make the following decisions:

The limit of liability to carry per accident.
The deductible to assume per accident.
The level of disability coverage to provide.
The level of death benefits to provide.

Companies will still be liable to their employees for legal responsibilities that are not covered by occupational accident insurance. Choosing the wrong coverage selection might expose a company to significant financial losses – a danger that workers’ compensation insurance protects against.

How They Differ

Workers’ Compensation

Mandatory Coverage – Workers’ Compensation Insurance is a state-mandated program that mandates employers to provide coverage for employees who are injured or ill at work. The standards and regulations may differ from one state to the next.
No-Fault System – Workers’ Compensation is a no-fault system, which means that employees are eligible for payments regardless of who caused the job accident. This method is intended to give injured workers prompt compensation without the need for lengthy court battles to identify fault.
Eligibility – In the US, workers’ comp is generally available to all employees, regardless of fault or negligence. It is mandated by state laws to ensure that employees are protected in case of work-related illnesses or injuries. Whether they’re a full-time employee, part-time worker, or seasonal staff, they’re typically covered under workers’ compensation. That is if your company meets the legal requirements.
Covered Benefits – Workers’ Compensation often pays for medical bills, rehabilitation costs, and a portion of an injured employee’s salary while they are unable to work. Long-term compensation may be awarded in the case of permanent impairments.
Employer Immunity – When covered by Workers’ Compensation Insurance, employers are generally protected from lawsuits made by employees for occupational injuries. This exemption is a trade-off designed to expedite the procedure and ensure that injured workers receive early compensation.
State Regulated – Workers’ Compensation programs are governed by state agencies. Each state has its own set of laws governing coverage criteria, benefits, and claim management.

Occupational Accident Insurance

Voluntary Coverage – Occupational Accident Insurance is often bought by employers to provide additional protection beyond what Workers’ Compensation may provide.
Fault Considerations – Occupational Accident Insurance, unlike Workers’ Compensation, usually considers fault when deciding compensation. Coverage may be limited if an employee is deemed to be at fault for their injury.
Flexible Coverage – Employers can tailor Occupational Accident Insurance coverage to their specific requirements. Medical bills, disability benefits, accidental death benefits, and other benefits may be covered. The scope of coverage, however, is determined by the specific policy chosen.
Eligibility – Occupational Accident Insurance is designed specifically for workers who are not eligible for workers’ compensation, such as independent contractors and other workers. Due to the fact that they are not typically covered by regular workers’ compensation plans, individuals who are self-employed, freelancers, and gig workers are examples of individuals who can benefit from occupational accident insurance. These non-traditional workers, who may be exposed to a variety of unique dangers and difficulties, are afforded an additional layer of protection by occupational accident insurance.
Excludes Certain Risks – Certain hazards or activities may be excluded from coverage under occupational accident insurance policies. And employees may be required to meet specified requirements to be eligible for compensation.
No Employer Immunity – Occupational Accident Insurance, unlike Workers’ Compensation, does not protect companies from employee lawsuits. If an employee has this coverage and suffers a working injury, they maintain the ability to sue their employer.

Choosing The Right Coverage

Consider Legal Requirements – Employers must comply with state-mandated Workers’ Compensation requirements. Failure to do so can result in legal consequences. While options, many consider Occupational Accident Insurance to be an additional layer of protection.
Evaluate Risks and Budget – It is important for employers to evaluate the dangers that are associated with their industry as well as the financial repercussions that could result from injuries that occur on the job. It is possible for occupational accident insurance to provide supplemental coverage that is tailored to specific requirements.
Communicate With Your Employees – Important is the transmission of the available insurance coverage in a clear and concise manner. It is important for employees to be aware of their rights under Workers’ Compensation as well as any additional coverage that may be given by Occupational Accident Insurance.
Consult With An Insurance Agent – When it comes to navigating the complexity of Workers’ Compensation and Occupational Accident Insurance, it might be helpful for companies to seek counsel from insurance professionals. They have the ability to help select the coverage that is best suitable for the specific conditions of your company.

Wrapping Up

EZ is the place to go if you are seeking workers’ compensation insurance. We take great satisfaction in making your shopping experience as simple and stress-free as possible. Not only do we provide our consumers with our undivided attention, but we also provide entirely tailored service and quick outcomes. Once you have completed our form, you will immediately be provided with free estimates from one of our representatives. A person who will comprehend your requirements from the very beginning. To ensure that you make the greatest choice possible and obtain the best coverage at the best price, we want to make sure that you do so. Make sure you check out your quotes right away because none of our services cost you anything.

For any questions, please do not hesitate to call us at (855) 694-0047. You’ll speak with a local insurance agent that is able to provide answers to all of your questions. In addition, we can assist you in locating the workers’ compensation policy that is most suitable for your company. Or for free instant quotes just enter your zip code into the box below.

How Employee Fatigue Affects Workers’ Comp

Employee fatigue has become a major worry for both workers and employers in today’s fast-paced and demanding work environments. Employee hours are increasing longer as our economy demands more and more from its workers. This frequently implies that employees can work much beyond the regular work week, putting them at risk of tiredness and fatigue. It is true that when we are weary, we are more prone to mishaps. We are less aware of our surroundings and cannot respond as swiftly to avoid injury. They can also have a significant impact on a company’s financial health.

Worker Fatigue

Fatigue is more than just feeling tired. Fatigue is a state of exhaustion that has persisted for an extended amount of time. It can have a significant impact on many aspects of an employee’s life. People are not designed to work for hours on end with no breaks. Our bodies require at least 7 hours of rest and recharge per day. Here are some examples of fatigue symptoms:

When employees are tired, their reaction time can slow down a lot. This could be dangerous or even deadly at some jobs.
Making decisions slowly or not at all. When employees are too tired to remember what to do, they often make bad choices. This effect on tired workers is very important because in some places of work, a bad choice can put a lot of people in danger.
Lack of attention span. It is harder for employees to focus on certain jobs when they are tired. If they can’t think straight, they might forget to do their work, which could lead to a dangerous situation.
Dozing off at work due to lack of sleep or rest.
When employees are tired, they might have any of these symptoms: aches and pains in their muscles, a change in their appetite, gastrointestinal issues, sleepiness, anxiety, headaches, or emotional distress.

Imagine that you have to do the same job every day, week after week, with nearly no breaks. Over time, this can and will lead to accidents. When our brains are tired, we have a higher tendency to mess up when we’re figuring things out. For businesses in fields where measures are important, this could be a major problem. Being tired, we might not pay as much attention to our surroundings. If you work with tools or operate heavy machinery, this is especially dangerous.

Impact Of Fatigued Employees

The costs associated with overworked employees go beyond the immediate issue of decreased production; they permeate many other parts of business operations, which has an effect on the bottom line. Employers have a responsibility to acknowledge the significance of treating fatigue in the workplace, putting into action initiatives that encourage employee well-being, and ultimately cultivating a work environment that is both healthier and more productive. Employers have the ability to lessen the financial burden of weariness and contribute to the long-term success of their businesses if they make investments in the health and satisfaction of their workforce.

Decreased Productivity

One of the most direct consequences of employee fatigue is a decline in productivity. Over-tired workers are likely to experience reduced focus, slower reaction times, and impaired decision-making abilities. This drop in productivity can lead to lower output, increased errors, and a general decline in the quality of work, all of which contribute to financial losses for employers.

Increased Absenteeism

Fatigue often leads to increased absenteeism as employees may find it challenging to meet their work commitments. Regular absences can disrupt workflow, result in missed deadlines, and require additional resources to cover the workload gaps. This not only affects immediate productivity, but can also result in additional costs associated with temporary staffing or overtime payments to cover absent employees.

Higher Accident Rates

Fatigue is a known contributor to workplace accidents. Over-tired workers are more prone to making mistakes, and their diminished alertness increases the risk of injuries and accidents. Workplace incidents not only incur direct costs such as medical expenses and potential legal liabilities, but can also lead to increased insurance premiums for employers.

Increased Healthcare Costs

Fatigue is associated with various health issues, both physical and mental. Over time, exhausted employees may experience a decline in overall health, leading to increased healthcare utilization and associated costs for employers. This includes expenses related to medical treatments, doctor visits, and potential long-term disability claims.

Employee Turnover

A workforce experiencing chronic fatigue is more likely to suffer from burnout and dissatisfaction. This dissatisfaction can contribute to higher employee turnover rates as workers seek environments that prioritize their well-being. The costs associated with recruiting, training, and onboarding new employees can be substantial for employers.

Lower Innovation and Creativity

Fatigue not only affects routine tasks, but also hampers creativity and innovation. Over-tired employees may struggle to think critically, solve problems, or contribute fresh ideas. This can hinder a company’s ability to adapt to changing market dynamics and innovate, potentially resulting in missed opportunities and revenue growth.

How You Can Prevent Employee Fatigue

It can be dangerous for employees to work when they are tired. According to research, being tired is just as bad for the brain as driving while drunk. Memory, balance, focus, decision-making, and movement skills are all affected by fatigue in workers. It also leads to about 13% of accidents and injuries at work every year. It’s true that you can’t suddenly make sure your employees get enough rest to do their job safely and well, but these tips can help companies make jobs safer by keeping workers from getting too tired at work. A chalkboard with the word 'Education' written in large, bold, white chalk letters. Above the letter 'A' is a drawing of a lightbulb, symbolizing an idea, and to the right is a graduation cap, representing learning. The chalkboard is framed with wood and set against a white brick wall background

Educate Your Employees

In some of the most significant incidents that have ever occurred in the workplace, fatigue has been identified as a contributing cause. It is important to provide training to all employees, particularly supervisors, in order to identify signs of exhaustion in workers. When employees are aware of the indicators, they are able to take greater precautions to ensure that they get sufficient sleep at night. For those in charge, bringing it to the attention of workers and encouraging them to take breaks is helpful.

Think About How You Schedule Shifts

Employees who work shifts that are late at night or overnight are more prone to experience high levels of fatigue. When scheduling staff, try to avoid arranging them for shifts that are irregular or rotating. Additionally, fatigue tends to develop tremendously during a shift that lasts for twelve hours. Employees should be given at least a 24-hour rest in between 12-hour shifts, and overtime should be prohibited for those working those schedules.

Enforce Breaks

In order for workers to recover from repetitive tasks, it is the responsibility of employers to guarantee that they receive their permitted breaks. It is possible to restore essential functions to the brain and boost focus with as little as fifteen minutes of break time.

Avoid Extended Shifts When Possible

According to the recommendations of the Occupational Safety and Health Administration (OSHA), companies should make every effort to prevent their employees from working more than forty hours per week or working odd shifts whenever it is feasible to do so. Some examples of uncommon shifts include working two shifts in the same day, such as working four hours in the morning and then returning for a three-hour shift in the evening. Another example is working two shifts in a single day. It may also involve shifts that are not consistent with one another, such as working an evening shift, then a morning shift, and then continuing on to work overnight shifts. Please do not hesitate to get in touch with OSHA directly if you consider your schedules could potentially compromise your safety in accordance with this recommendation.

Paid Sick Leave

If you’re a business owner, paid sick leave might seem like an extra cost to think about, but new paid sick leave isn’t just a perk for workers. It’s also good for business. Employees who can take paid sick leave are less likely to miss work, which is good for business. Being sick at work makes you much less effective, and there’s a chance that you could spread the infection to other people. Putting your whole staff at risk to meet business goals is a very unprofessional thing to do. It can also cost a lot more in the long run than just giving employees a few sick days a year.

One thing we can say for sure is that using employee scheduling tools to track and manage your staff is a must if you want to make your business run more smoothly. Without a doubt, it can be very helpful for people who have problems with their workers being too busy or people who don’t want it to happen in the first place.

Finding Business Insurance With EZ

We are able to assist you in obtaining commercial insurance to safeguard your company as well as group health insurance for your employees. To ensure that you are able to get the most suitable insurance coverage for your company and its employees, our representatives collaborate with the most reputable insurance providers around the country. In fact, we are able to save you hundreds of dollars annually. We do this by working with your budget to locate the most suitable coverage for you or your family. If you have any inquiries, please do not hesitate to contact us at the following numbers: 877-670-3531 for assistance with group health insurance, and (855) 694-0047 for assistance with commercial insurance. You can also simply enter your zip code into the bar below for free instant quotes.

What Is An Assigned Risk Pool?

What Is An Assigned Risk Plan? text overlaying image of a bunch of hands holding pieces of a puzzle An assigned risk plan is a workers compensation plan set up by the state for businesses that cannot get a workers compensation plan from a ‘regular’ insurer. Plans with an assigned risk are also known as the leftover market or the assigned risk pool. This safety net is the last option for employers who don’t have any other way to get coverage. All states except those that have a monopoly have made a plan. How the plan is run and paid for depends on the laws in each state.

Reasons You Could Be In The Assigned Risk Pool

When insurance companies don’t want to write a workers’ comp contract for a specific business (for reasons we’ll list below), that business goes into the workers’ comp pool to be assigned to an insurance company. These less desirable businesses will be spread out fairly among the workers’ compensation carriers. You may be in the workers’ comp pool for the following reasons:

Poor claims history – If a business has too many claims for injuries, insurers might think that its owners don’t care about safety.
New company – An insurer can’t tell much about a new company because it doesn’t have a track record. This makes it difficult to judge the risk the company would take by insuring you.
High-risk industry – Many insurance companies don’t want to cover employers in dangerous jobs like logging, trucking, and roofs with workers’ compensation insurance.

Insurance companies think that businesses with these traits are more likely to have a claim, so they may not want to offer a workers’ comp insurance. But because most states require workers’ comp insurance, the pools are set up to choose a company for you.

Assigned Risk Plan Administration

All states have a person in charge of running the plan and making sure policies are given out. In most states, the National Council on Compensation Insurance (NCCI), the state competitive insurance fund, the state rating group, or a third party is in charge of managing workers’ compensation insurance. The NCCI is in charge of running assigned risk plans for 22 states. Each of these 22 states requires all workers’ compensation insurers that do business within its borders to take part in the assigned risk plan. Insurance companies can either be:

Direct assignment – This means the NCCI assigns workers’ compensation policies from the companies that have to purchase a policy through the assigned risk pool. The business applies then the NCCI hands their application to one of the direct assignment companies.
Reinsurance – The insurers in this group basically insure the direct assignment companies. So if a direct assignment insurer has a claim or policies that they cannot pay for themselves the reinsurance company financially protects them so they can pay the claim without being bankrupt.

In some states, the state competition fund is in charge of running the assigned risk plan. This means they give businesses the option to either buy from the state fund or buy from private insurers. So, the state fund competes with the private insurance companies for business. These states are:

Most of the other states have either chosen their rating group or an insurance company to run their plans.

Cost Of Assigned Risk Plans

The assigned risk pool is supposed to be a last-resort market for high-risk businesses. Because of this, the rates are supposed to reflect the risk that the insurance companies are taking by covering this group of high-risk plans. Rates vary from state to state, but in general, it’s safe to think that the rates in the pool are the highest available for most workers’ compensation class codes. In fact, many companies in the standard voluntary market base their rates on the rates of the given risk pool.

Getting Coverage

If you or your insurance agent can’t find workers’ compensation coverage for your business in the standard market, you or your agent can send an application to your state’s assigned risk plan provider. How to apply changes from state to state. If your state’s plan is run by the NCCI, you can apply online 24 hours a day or send your application through the U.S. Postal Service to the NCCI. To get coverage from an assigned risk pool, you must have tried to get coverage from an insurer, but have been turned down. Each state has its own rules about how many rejects are needed. For example, West Virginia companies can only apply for coverage in the assigned risk plan if they can show that two insurers have turned them down.

Getting Out Of The Assigned Risk Pool

If you’re in the pool, there are no extra fees or charges. The only problem is that you don’t get to choose your insurance company, and you usually don’t have much choice about how to pay. Your payments can also be up to 400% higher than those of businesses that aren’t in the risk pool. If that bothers you, you may want to get out of the workers’ comp pool as soon as possible. This is how:

Improve Your Claims History

If you are in the workers’ compensation pool because you have made too many claims in the past, the only way out is to make fewer claims in the future. And a detailed safety plan is the best way to cut down on claims. This should include figuring out what the risks are and how to deal with them, as well as giving all workers ongoing safety training. You could also set up a safety committee or use tools for safety or incident management.

Even if you do all of the above, you can’t stop all accidents from happening, so it’s also important to know how to handle them when they do. This is because, in addition to how often you file a claim, the length of a claim can also make your workers’ compensation costs go up. Insurance companies want as few open claims as possible, so claims that take a long time to settle will make your workers’ comp cost go up.

Because of this, you should have a plan to help wounded workers get back to work as soon as possible. This could include a strategy called “light duty,” which lets employees go back to work without having to do any tasks that will make their injury worse.

Have Patience

If your business is new and you are in the workers’ compensation pool, you have no choice but to wait it out. If you don’t have any claims and don’t work in a high-risk business, you should be able to get out of the workers’ comp pool in a few years. So patience is key here. Bide your time in the risk pool and put safety procedures in place to keep your claims low and claims length short that way when it’s time to move out of the pool you can do so easily.

Work With An Independent Agent

If your business is in a high-risk field, you may not be able to do anything. Because of your risk, insurers might not be ready to give you a policy. Each provider is different, though. Just because one insurance company won’t give you a policy doesn’t mean that no one else will. Even if one insurance company doesn’t take your business one year, that doesn’t mean they won’t the next. Carrier insurance rules change so often that the same rules may not apply from one year to the next.

So you might be able to do a little research to see if there is a company that will take you on. Even better, you could work with an independent agent who can shop around to different companies to find one that might be willing to cover you.

How EZ Can Help

Workers’ compensation can be stressful. Hope is often at the end of the tunnel. There are usually ways to improve your workers’ compensation position. An independent insurance agent can help you choose a workers’ comp company. They can also assist you in managing your workers’ compensation policy in other ways that save time and money. EZ is the place to go if you need workers’ compensation insurance for your business. We are proud of the fact that we pay attention to each customer as a person and try to make sure you feel comfortable while you shop.

We offer personalized service and instant, free quotes from an agent picked based on your needs. If you’d like to get started with a quote you can enter your zip code in the box above. We want you to make the best decision possible and get the best deal for your money. Our services are always free, and there are no hassles or obligations to sign up. You can also call us at 877-670-3538 if you still have questions. You can talk to an insurance agent in your area, who will be able to answer all of your questions and help you find the best workers’ compensation policy for your business.

What Is a Workers’ Compensation Audit?

What Is a Workers' Compensation Audit? text overlaying image of paperwork and a calculator You know how important it is to have workers’ compensation insurance if you run a business. More often than not, you legally have to have this kind of insurance. But workers’ compensation is one of the hardest types of business insurance to understand and follow the rules for. Each state has its own rules about workers’ compensation insurance. Such as whether or not a business needs it and how much the payment should be. However, one thing that all states require is that insurance companies must do a workers’ compensation audit to make sure that companies are paying the right amount for their benefits.

What Exactly Is The Audit?

When you buy workers’ comp insurance, you usually have to give an estimate of how much your employees will be paid and what kinds of work they will do during the policy time. Along with other things, your estimate is used by your insurance company to figure out how much your workers’ comp insurance will cost.

You usually make estimates for one year’s worth of payroll. But sometimes those don’t match up with your actual payroll by the end of the year. There may be more work than expected during the year, or unplanned events may cause your verified payroll to be less than what was planned. Because of this, most state regulators need an audit every year so that the premium can be adjusted as needed so you’re never paying too much or not enough for your coverage.

During the audit your insurance company will check that the expected payroll and other records you supplied at the start of the policy match the confirmed payroll and work done during the policy period. If the records aren’t consistent your premium will change. If you overestimated then your policy will be cheaper and vice versa. There’s a few things you should know about the audit:

Audits are mandated by law

The word audit sometimes has a jarring reaction because we’re used to hearing it in a negative light around tax time. However, with workers’ comp you aren’t being audited because they think you’re committing fraud. They are checking to see if the payroll and class codes listed at the start of your insurance policy match the ones listed at the end, and they also want to know if any substitutes you hired had their own insurance. It’s just fact finding to not only make sure you’re paying what you should but also makes sure the insurance company isn’t charging you too much.

Types of Audits

There are three types of audits your company can go through depending on the size, the industry, and the auditor themselves.

Preliminary Audit – When you first apply for workers’ compensation insurance, your insurer may do a preliminary audit of your business to figure out your initial rate.
Mail Audit – The mail audit is when your insurance company gives you a workers’ comp audit form in the mail. It is also called a voluntary audit. You just need to fill out the workers’ comp audit form and send it back to the insurance company along with any other paperwork they ask for. If you run a small business, this is probably how your workers’ comp audit will go.
Phone Audit – This type of workers’ comp audit still requires you to send in payroll information and fill out some forms. The only change is that someone from the insurance company will call you to go over your paperwork. Medium-sized businesses are most often given the phone audit.
Physical Audit – A physical workers’ comp audit usually only happens if your business is very big or is thought to be committing major fraud. When your insurance company does a physical audit, they will send someone to your business to talk, look at your payroll records, and possibly ask for more paperwork. If you need a physical workers’ comp audit, you might want to hire a workers’ comp audit attorney to make sure you follow all the rules of the audit and don’t put your business at too much risk of being sued.

Pay-As-You-Go Workers’ Comp

“Pay as you go” workers’ comp insurance is not a new idea, but small businesses are using it a lot more now that workers’ comp prices are going up. A business typically pays a premium for normal workers’ comp insurance based on how much they expect their payroll for the upcoming year to be. Pay-as-you-go uses real-time payroll to figure out workers’ comp premiums month by month instead of an estimated yearly payroll amount. This means that premium payments are more accurate. This makes it less likely that you’ll pay too much during the year or have to pay more at the end of the insurance term because you didn’t report enough payroll.

How To Prepare

Once your insurer has contacted you and set up when and how your audit will take place it’s time to prepare for the appointment.

1.Work With The Auditor

Talk to your insurance auditor and be polite and friendly when you answer questions or give them information. Also, remember to be clear, and honest. Look over any workers’ compensation audit worksheets they make, and don’t sign off on any that aren’t finished or correct. This will keep the inspector and you from having to fill in the blanks over and over again. For your own notes, you should also make a copy of the final workers’ comp audit worksheet.

2.Collect Your Records

The cost of workers’ compensation insurance depends on your payroll, risk, and claims history. The auditor needs to know about all of these things. Most of the time, audit notices list the papers that the auditor can use to check the information. This list may be different for each insurance company, but most of them will want some or all of these things:

Company operation description
Employee job descriptions
Number of employees
Owners names and titles
Description of any contractor or subcontractor work
Accounting ledger
Federal 1099, W-2, and W-3 transmittals
Federal Profit and Loss From Business Schedule C (Form 1040)
Payroll register
Federal Employer’s Quarterly Tax Return (Form 941)
Business checkbook
Federal Employer’s Annual Tax Return (Form 944)
Federal Employer’s Annual Unemployment (FUTA) Tax Return (Form 940)
State unemployment insurance tax reports
Time cards
Overtime records
Any payments made to independent or subcontractors and laborers
Receipts for materials
Subcontractors’ insurance certificates (if any subcontractors were hired)
Business experience modification worksheet

Payroll

Payroll, which is also called remuneration, is where your workers’ comp premium starts, so when you’re getting ready for an audit, you want to make sure that number is correct. Each state has its own meaning of “remuneration,” but in general, it includes:

Gross wages and salaries
Commissions
Bonuses
Overtime, holiday, vacation, and sick day payments
Employee contributions to 401ks, savings plans, or IRAs
Any lodging or meals provided to employees
Payment or allowances for employee tools

Alternatively, payments that aren’t normally considered salary when workers’ comp premiums are calculated may be included in an employee’s paycheck. Many states, for instance, don’t include:

Tips and gratuities
Employer payments to group insurance
Severance pay
Reimbursed business expenses
Special rewards for individual invention or discovery
Active military duty pay
Uniform allowances
Employee discounts on goods and services

In most cases, business owners don’t need to be covered by workers’ compensation insurance, so their pay isn’t looked at during a workers’ comp audit. Nevertheless, some states let sole proprietors, corporate officials, partners, and members of limited liability companies (LLCs) choose to get coverage. As a result, their pay is handled differently because it is usually a lot higher than regular workers’ pay.

The state generally sets an annual wage for sole proprietors or partners that is different from their normal salary. The rate the state sets is what goes into the workers’ comp audit paperwork. For example, corporate officers who choose to participate in workers’ compensation get a weekly salary that is between the state’s maximum and minimum wages. This depends on the workers’ compensation rules in the member’s state.

3. Update Job Descriptions

The dangers your employees face at work are also taken into account when figuring out your workers’ compensation costs. This is done so that the auditor can look into everyone’s tasks and how your business runs in general. This could mean going over the job titles you already have or filling out a form that lists what each employee does. You should know a lot about what the people who work for you do, no matter what. Job titles should be kept up to date, or they should be made from scratch if they aren’t already.

You might want to skip this step, but in the event of a workers’ comp check, having clear job descriptions can be very helpful. Your inspector can figure out the right governing class code for your business with the help of accurate job descriptions. There is a base rate for that class code that is used to help calculate your premium.

4. Review The Audit

Once the audit is over, look over the auditor’s work to make sure it matches what you know about the payroll and processes of your business. After looking over the auditor’s work, sign any papers they ask for to show you’ve done your part and understand the results. If you did the audit over the phone or mail, you might not be able to do this step, but your insurance company should send you a summary of what the inspector found. You can ask your insurance company for more details if those results don’t make sense.

Working With EZ

If you need any help with coverage for your business, EZ.Insure is here to help. We’ll get you instant quotes and set you up with your own dedicated agent – for free! You’ll get all of your questions answered and get the most accurate quotes. You have enough on your plate, so let us take care of your insurance needs. To get started simply enter your zip code in the bar below, or you can speak to an agent by calling 877-670-3538.

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Have Patience

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What Exactly Is The Audit?

Audits are mandated by law

Types of Audits

Pay-As-You-Go Workers’ Comp

How To Prepare

1.Work With The Auditor

2.Collect Your Records

Payroll

3. Update Job Descriptions

4. Review The Audit

Working With EZ