As a small business owner, you care about your employees’ success, as well as their wellbeing and their safety in the workplace. With that said, even the most conscientious employers have to face the fact that mishaps can and will occur even in the safest of workplaces. Accidents are inevitable in any workplace. So, it’s crucial that you have sufficient workers’ compensation coverage that will protect both your business and your employees. As important as workers’ compensation coverage is, it can feel like a burdensome expense. And yes, it can be expensive. Luckily there are ways to save money on your premiums so, you can have peace of mind while sticking to your small business’s budget.
Calculating Workers’ Compensation Premiums
The amount you’ll pay for worker’s compensation insurance is calculated using a simple formula. The premiums for workers’ compensation insurance are calculated per $100 of your company’s payroll. That means that your rate will go up as you hire more people.
In addition, the nature of your business, and the type of employees you have, will play a major role in establishing your premium. When purchasing workers’ comp, you’ll have to give each employee a class code, based on the risks of their job. Each state provides the class codes for different types of employees. For example, a warehouse supervisor and an administrative worker will have different codes. So, there will be a big difference between the rate at a factory and the rate at a beauty supply store. In order to ensure that your business is charged a fair and reasonable rate, it is crucial that your employees are classified correctly.
Your final price will be adjusted based on a number of factors, including “modifiers.” The modifier will be based on your claim’s history. Your insurance company will go over your claims history and assign you a modifier. The typical modifier rating is between .75 and 1.25. Modifiers of 1.0 or less are possible if your business has a documented history of successfully lowering workers’ exposure to injury risk. If there have been numerous incidents at your workplace, your modifier will be higher than 1.0. If you can get your modifier for workers’ compensation insurance down to 1.0 or lower, your premiums will go down.
9 Ways to Cut Workers’ Compensation Costs
The following are some simple things that you can do right now to cut down on your workers’ compensation costs:
Choose the Right Workers’ Compensation Policy
It is essential to do some comparison shopping in order to find the best workers’ compensation insurance policies. In the same way it is when choosing the best auto or health insurance policy for yourself. If you live in a state that has a competitive market, which the vast majority of states do, it is in your best interest to speak with multiple insurance companies about the premiums they are willing to offer you and your business.
Once you have a policy in place, you should continue to shop around at least once every few years, since insurance companies will periodically change their prices in an effort to woo customers away from their competitors. Unfortunately, if you live in a state that does not have a competitive market, you won’t have the option to shop around. But there are still other steps you can take to lower your premiums.
Follow Claims Management Best Practices
Perhaps the single most important thing you can do to keep your workers’ comp costs under control is to make sure you’re handling claims with best practices for claims management. “Best practices” include simple tasks like keeping in touch with the employee and possibly medical personnel. This can mean staying on top of any possible issues that may pop up, such as coverage not kicking in on time or money not coming through.
If you need help, an adjuster can make the process go smoothly and save you money by doing things like making sure all paperwork is filed on time, verifying coverage, and keeping a daily diary of all work completed on the claim. This may cut the payout amount by as much as half.
Create Strong Safety Protocols
Creating a safe workplace environment can do wonders for employee morale. As well as help save money on workers’ compensation claims. It’s less difficult than you might think to establish a culture of safety. In fact, you’re probably already doing some of this work already.
First, make sure your staff has access to the tools and information they need to stay safe on the job.
If you don’t do so already, schedule periodic safety inspections.
Use daily safety checks to constantly remind workers to be cautious whenever they are at work.
Plan weekly and/or monthly in-depth inspections.
Putting an emphasis on safety will not only reduce accidents and injuries among workers and help lower your workers’ compensation premiums but will also demonstrate your concern for their well-being.
Know What to Do in Case of Injury
Having a strategy ready in the event of a workplace injury is an important part of fostering a culture of safety. Managers, co-workers, and the claims adjuster would all have immediate tasks to perform in this scenario. For this to go smoothly, each person involved needs to know what they are responsible for.
Having a plan in place gives workers the opportunity to make choices that lessen the severity of injuries on the job. In the event of an accident, they will feel more at ease knowing that everyone around them is prepared to help.
Offer New Hire Incentives
Incentive programs are a great way to motivate employees, especially new hires, to follow the safety procedures in place. You can offer more experienced workers incentives to teach newer workers about your business’s safety culture.
Utilize Return-To-Work Programs
Workers’ compensation costs tend to be lower for businesses that utilize return-to-work programs. These programs encourage injured workers to return to some sort of duties as soon as possible. Doing so will help with the indirect costs of an employee’s injury such as:
Overtime pay for workers who do the injured person’s duties,
Compensation to cover a decrease in productivity,
The cost of hiring and training new workers.
The time that managers or supervisors have to take away from their administrative duties to help out.
With all that said, the sooner an injured worker returns to work and starts making money again, the less you will have to pay. So consider implementing some sort of return-to-work program.
Look for Workers’ Compensation Discounts
Find out if your state offers workers’ compensation discounts to businesses that implement safety programs. For instance, some states reward businesses that promote drug-free workplaces with tax breaks. Since workers who use drugs while on the job are more likely to get injured. So, showing that you promote a drug-free environment by doing things like requiring regular drug testing for employees can get you a tax break for being proactive.
As noted above, not only will different companies have varying overall workers’ compensation rates. But the costs associated with various categories of workers will also vary. A sheet metal worker, for instance, will have a different classification code than a bookkeeper. Who spends little time in the factory. This means that it’s extremely important to verify that each worker has been assigned the appropriate classification. You can save a lot of money by following this one piece of advice.
Check for Workers’ Compensation Safety Rewards
It is possible that the number of accidents that take place at work will decrease after you begin putting some of these ideas into action. Check with your insurance company to see if they will reduce your premiums in recognition of the fact that your business has been safer for the past year. These kinds of safety rewards are typically distributed after a period of one year during which there were fewer claims filed. These rewards are not guaranteed. So, it is important to check with your insurer to determine whether or not safety rewards are currently being offered.
Get Workers’ Compensation With EZ
Most businesses are required by law to carry workers’ compensation insurance. Doing so will not only protect your business but will also protect your employees. Keeping your employees safe, though, does not have to be a financial burden on your business. There are a lot of different ways to encourage safety routines and programs, all of which will help you cut down on the amount of money you have to spend on workers’ compensation. Your employees will be able to return to work as soon as they are medically cleared to do so if the best practices for claims management are implemented and adhered to in a timely manner. Not only will production return to normal, but also the costs associated with workers’ compensation will decrease.
If you’re looking for the best workers’ comp policy, come to EZ for free instant quotes from one of our licensed agents. And, if you already have workers comp benefits but would like to shop around, we can help you look for a better deal. Your EZ agent will be well-versed in the regulations in your area. They will be able to advise you as you shop around for the best policy at the most affordable price. To get started, simply enter your zip code in the box above. Or give us a call at (855) 694-0047 to speak with one of our licensed agents. Also be sure to check out our blog for more resources focused on helping business owner save money and stay protected.
Embarking on a business venture is an exciting journey filled with possibilities and opportunities. However, it’s essential to be prepared for the unexpected challenges that may arise. One crucial aspect of this preparation is securing the right business insurance. Each industry faces unique risks. So, understanding the types of insurance coverage needed is key to safeguarding your business. As well as ensuring its long-term success. In this article, we’ll explore common business industries and the types of business insurance they may need. Shedding light on why these policies are essential.
Types Of Business Insurance
Before we go over what types of insurance different industries need. Let’s look at the different types of business insurance policies available.
General liability insurance is a fundamental type of business insurance. It provides coverage for a range of common risks and liabilities faced by businesses. Also known as commercial general liability (CGL) insurance. It is designed to protect businesses from financial losses associated with third-party claims of bodily injury, property damage, and personal injury. General liability typically covers:
Bodily Injury
Bodily injury coverage helps protect your business in the event that someone is injured on your premises or as a result of your business operations. This coverage can help pay for medical expenses, and legal fees. As well as any potential settlements or judgments if your business is found liable for the injury.
Property Damage
Property damage coverage provides protection if your business causes damage to someone else’s property. This could include damage to a client’s home or office space. Or damage to other physical assets belonging to third parties.
Personal and Advertising Injury
Personal and advertising injury coverage is designed to protect against non-physical injuries, such as libel, slander, or infringement of copyright. If your business is accused of damaging another party’s reputation through advertising or other communications, this coverage can help cover legal costs.
Legal Defense
General liability insurance typically covers the costs of legal defense, including attorney fees, court expenses, and settlements or judgments. This is crucial for businesses facing lawsuits, even if the claims are ultimately determined to be groundless.
Product and Completed Operations
If your business manufactures, sells, or distributes products, or if you provide services, products and completed operations coverage can protect against claims arising from defects in products or services that cause bodily injury or property damage.
Medical Payments
Medical payments coverage helps pay for medical expenses if someone is injured on your premises. Regardless of who is at fault. This coverage is usually more limited than bodily injury coverage, but can provide swift reimbursement for minor injuries without the need for a lawsuit.
Business Property Insurance
Business property insurance, also known as commercial property insurance, is a type of insurance coverage that protects a business’s physical assets. Including buildings, equipment, inventory, furniture, and other property, against various risks and perils. This insurance is crucial for businesses to recover from financial losses that may result from damage or loss of property due to covered events. The key coverage of business property insurance are:
Physical Assets – Business property insurance provides coverage for the physical assets owned or leased by a business. This includes the building itself, if applicable, as well as contents such as inventory, equipment, furniture, fixtures, and signage.
Covered Perils – Policies typically specify the perils or events that are covered. Common covered perils include fire, theft, vandalism, windstorms, hail, explosions, and certain types of water damage. It’s important for businesses to carefully review and understand the specific perils covered by their policy.
Business Interruption – Many business property insurance policies include business interruption coverage. This component helps businesses recover lost income. And cover ongoing expenses if the business is temporarily unable to operate due to a covered event, such as a fire or natural disaster. It can include coverage for rental income, payroll, and other fixed costs.
Replacement Cost – Business property insurance policies may offer coverage based on either replacement cost or actual cash value. Replacement cost coverage reimburses the cost to replace or repair damaged property without deducting for depreciation, providing a more comprehensive form of coverage. Actual cash value coverage considers depreciation, resulting in a lower reimbursement amount.
Cyber liability insurance is a type of insurance coverage designed to protect businesses from financial losses and liabilities associated with cyber-related risks and events. As businesses increasingly rely on technology and digital assets. The exposure to cyber threats such as data breaches, hacking, and other cybercrimes has become a significant concern. Cyber liability insurance helps businesses mitigate the financial impact of these risks by providing coverage for various expenses and liabilities.
Data Breach Response – Coverage for expenses related to responding to a data breach. This may include the costs of notifying affected individuals, providing credit monitoring services, and managing public relations efforts to minimize reputational damage.
Legal and Regulatory Expenses – Protection against legal costs and regulatory fines that may result from a data breach or other cyber incident. Cyber liability insurance can cover the expenses associated with legal defense, investigations, and compliance with data breach notification laws.
Data Restoration – Coverage for the costs of restoring or recreating lost or damaged data as a result of a cyber incident. This may include expenses related to data recovery and reconstruction efforts.
Business Interruption – Compensation for financial losses resulting from a cyber incident that disrupts business operations. This coverage can help replace lost income and cover ongoing expenses during the period when the business is unable to operate normally.
Cyber Extortion – Protection against costs associated with cyber extortion attempts, such as ransomware attacks. This coverage may include payments made to cybercriminals to restore access to data or systems. As well as expenses related to negotiating with extortionists.
Forensic Investigations – Reimbursement for the costs of investigating a cyber incident to determine the extent of the breach, identify the source of the attack, and implement measures to prevent future incidents.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, is a type of insurance coverage designed to protect professionals and businesses that provide professional services from claims of negligence, errors, or omissions in the course of their work. This insurance is particularly relevant for individuals and companies in service-based industries where clients rely on their expertise and advice.
Professional Negligence – Coverage for claims arising from alleged professional negligence, errors, or mistakes in the performance of professional services. This can include errors in judgment, faulty advice, or failure to meet the standard of care expected in the industry.
Legal Defense Costs – Reimbursement for legal expenses associated with defending against claims of professional negligence. This can include attorney fees, court costs, and settlements or judgments resulting from lawsuits.
Breach of Duty – Coverage for claims related to a breach of professional duty. This could involve a failure to perform services as promised, failure to meet contractual obligations, or other breaches of professional duty.
Defamation – Protection against claims of defamation, libel, or slander arising from the provision of professional services. This coverage can address legal costs and settlements associated with damage to a person’s reputation.
Copyright Infringement – Coverage for claims of copyright infringement related to the creation or dissemination of professional work. This is particularly important for professionals in creative industries where intellectual property is a significant concern.
Workers’ compensation insurance, commonly referred to as workers’ comp, is a type of insurance that provides financial and medical benefits to employees who suffer job-related injuries or illnesses. It is a crucial component of the social safety net and is designed to protect both employees and employers. It helps injured or ill employees by providing coverage for medical expenses, rehabilitation costs, and a portion of lost wages. At the same time, it protects employers from lawsuits related to workplace injuries.
Medical Benefits – Workers’ compensation insurance covers the costs associated with medical treatment and care for work-related injuries or illnesses. This includes doctor visits, hospital stays, surgeries, medications, rehabilitation, and other necessary medical services.
Income Replacement – If an employee is unable to work due to a work-related injury or illness, workers’ compensation provides partial wage replacement. Typically, a percentage of the employee’s pre-injury wages is paid to help cover living expenses during the period of disability.
Disability Benefits – Disability benefits are provided to employees who experience a temporary or permanent disability as a result of a work-related injury or illness. The level of disability benefits is determined by the severity and nature of the disability.
Death Benefits – In the unfortunate event of a fatal workplace injury or illness, workers’ compensation insurance provides death benefits to the surviving dependents of the deceased employee. This includes compensation for funeral expenses and financial support for the dependents.
Business Interruption Insurance
Business interruption insurance, also known as business income insurance, is a type of insurance coverage that provides financial protection to businesses in the event of a covered loss that disrupts their normal operations. This coverage is designed to help businesses recover from the financial impact of a temporary suspension of operations due to covered perils, allowing them to maintain financial stability during a challenging period.
Income Loss – Business interruption insurance covers the loss of income that a business may experience due to a covered event, such as a fire, natural disaster, or other insured peril. This coverage extends to the profits that would have been earned during the period of interruption.
Fixed Costs – In addition to income loss, the policy typically covers certain fixed costs that continue even when operations are temporarily halted. This can include rent or mortgage payments, utilities, and certain other ongoing expenses necessary for the business to resume normal operations.
Covered Perils – Business interruption insurance is triggered by specific perils or events that are covered by the policy. Common covered perils include fires, natural disasters, vandalism, and other events as outlined in the insurance contract. It’s important for businesses to understand the perils covered and, if needed, consider additional endorsements for specific risks.
Product Liability Insurance
Product liability insurance is a type of insurance coverage designed to protect businesses from financial losses and legal liabilities arising from claims related to defects or problems with products they manufacture, distribute, or sell. This insurance is crucial for businesses involved in the production and sale of goods, as it helps mitigate the financial impact of legal expenses, settlements, or judgments resulting from product-related claims.
Bodily Injury and Property Damage – Product liability insurance provides coverage for claims related to bodily injury or property damage caused by a defect in a product. If a product is found to be defective and causes harm to a consumer or their property, the insurance can help cover the associated medical expenses, repair costs, or legal fees.
Legal Defense – One of the primary benefits of product liability insurance is the coverage for legal defense costs. If a business faces a lawsuit related to a defective product, the insurance will typically cover the expenses associated with hiring attorneys, court fees, and other legal costs.
Manufacturing or Design Defects – Product liability insurance typically covers claims arising from both manufacturing defects and design defects. Manufacturing defects occur during the production process, while design defects are inherent flaws in the product’s design that make it unreasonably dangerous.
Employment Practices Liability Insurance (EPLI)
EPLI is a type of insurance coverage designed to protect businesses and employers from the financial consequences of employment-related lawsuits. These lawsuits can arise from various employment-related issues, such as wrongful termination, discrimination, harassment, retaliation, and other violations of employment laws. EPLI provides coverage for legal defense costs, settlements, and judgments associated with such claims.
Wrongful termination claims – Protection against claims of wrongful termination or dismissal, where an employee alleges that their termination violated employment contracts, implied contracts, or anti-discrimination laws.
Discrimination claims – Coverage for claims of discrimination based on factors such as age, gender, race, religion, disability, or other protected characteristics. EPLI helps businesses address allegations of discriminatory practices in hiring, promotions, and other employment decisions.
Harassment claims – Protection against claims of workplace harassment, including sexual harassment or other forms of harassment that create a hostile work environment. EPLI assists in covering the costs associated with investigations, legal defense, and potential settlements.
Third-party liability – Some EPLI policies may provide coverage for claims brought by non-employees, such as clients, customers, or vendors, alleging wrongful employment practices.
Commercial auto insurance is a type of insurance coverage designed to protect businesses and their vehicles used for business purposes. This insurance provides financial protection in the event of accidents, injuries, or property damage involving vehicles owned or operated by a business. Commercial auto insurance is crucial for companies that rely on vehicles for various business activities. Including transportation of goods, services, or employees.
Business Owned Vehicles – Commercial auto insurance covers vehicles owned or leased by a business and used for business purposes. This can include cars, trucks, vans, and other types of vehicles essential to the business’s operations.
Liability – Liability coverage is a fundamental component of commercial auto insurance. It provides protection against bodily injury and property damage that the business may be legally responsible for in the event of an accident. This coverage helps pay for medical expenses, repair costs, and legal expenses associated with third-party claims.
Collision – Collision coverage is designed to cover the cost of repairs to a business-owned vehicle in the event of a collision, regardless of who is at fault. This coverage helps businesses get their vehicles back on the road quickly after an accident.
Uninsurance/Underinsured Motorist – This coverage protects the business and its drivers in the event of an accident with a driver who either has no insurance or insufficient insurance to cover the damages. Uninsured/underinsured motorist coverage helps bridge the gap in such situations.
Industries
As we said, every industry is different. While most policies can help all of these industries there are certain policies that each industry needs more than the others.
Retail
The retail industry is a dynamic and ever-evolving sector that thrives on customer interactions, sales, and the management of diverse inventory. Amidst the excitement of running a retail business, it’s crucial for owners to prioritize risk management by investing in the right insurance policies. From protecting against potential liabilities to mitigating financial losses. A tailored insurance strategy can be the key to long-term success in the retail landscape. Retail companies typically need:
General liability insurance.
Commercial property insurance.
Workers compensation insurance.
Business interruption insurance.
Product liability insurance.
Cyber liability insurance.
Professional Offices
The professional office industry is a diverse and dynamic sector encompassing various professions. From legal and accounting services to consulting and creative endeavors. Amid the hustle and bustle of daily operations, it’s paramount for professionals in this industry to prioritize risk management by investing in the right insurance policies. From protecting against potential liabilities to mitigating financial losses, a well-tailored insurance strategy is crucial for ensuring the sustained success of professional offices. These types of companies need:
Professional liability insurance.
General liability insurance.
Cyber liability.
Business property insurance.
Workers’ compensation insurance.
Employment practices liability insurance (EPLI).
Construction
The construction industry is a powerhouse of growth and development, transforming blueprints into structures that shape communities. Amid the dynamism and innovation, construction businesses face a myriad of risks that can impact projects, finances, and reputations. To safeguard against unforeseen challenges, it’s crucial for construction companies to have a robust portfolio of business insurances. From protecting against accidents on the job site to addressing potential legal liabilities, the right insurance coverage is the cornerstone of a successful construction business.
General liability.
Commercial property.
Workers’ compensation.
Professional liability.
Commercial auto.
Food Service
The food service industry is a vibrant and dynamic sector, offering a myriad of culinary delights to consumers worldwide. While chefs and restaurateurs focus on creating exceptional dining experiences. It’s equally crucial for businesses in the food service industry to prioritize risk management through comprehensive business insurance. From protecting against liability claims to ensuring the safety of employees and patrons. The right insurance coverage is the key ingredient for sustained success in the food service realm.
General liability insurance.
Commercial property insurance.
Business interruption insurance.
Product liability insurance.
EPLI
Working With EZ
In every industry, the importance of business insurance cannot be overstated. These policies act as a safety net. Providing financial protection and peace of mind as you navigate the challenges of running a business. Whether you’re in retail, technology, construction, healthcare, or any other industry. Understanding your unique risks and securing the appropriate insurance coverage is a proactive step toward building a successful business. Consult with insurance professionals to tailor a policy that suits your specific needs. Ensuring that your business is well-prepared for whatever the future may hold.
No matter what type of business insurance you need, EZ can help. Our agents work with the top insurance companies nationwide to make sure you find the best insurance for your business. In fact, we can save you hundreds of dollars a year by working with your budget to find you the best coverage. If you have questions, feel free to give us a call at 877-670-3538 or enter your zipcode into the box below for free instant quotes.
Accidents happen. If an employee gets hurt at work, not only can you lose a lot of money in a lawsuit, but you can lose your business as well. The best way to protect yourself is with a Workers’ Compensation Insurance Plan. This will protect your business in the event of an employee’s injury or death at the workplace. EZ.Insure knows how important your business is, and we want to protect your business from a lawsuit that could happen at any point in time.
What Is Workers’ Compensation?
If an employee gets hurt on the job, it can end up costing you your business if you are not insured.
Often referred to as “workers comp,” every state has made it mandatory to provide this type of insurance program to employers. The insurance serves both the employee as well as employer; it assures injured employees that they will receive the compensation and medical care needed until they are able to go back to work.
This also protects employers from a lawsuit when an employee is injured on the job. Every state has its own regulations for the program, and while some have a federal insurance plan, some businesses choose private insurers.
The Different Types Of Benefits
In most cases an employee will receive benefits whether the disability is permanent or temporary. Some states will allow the employee to be compensated for the time out of work, while others specify a maximum number of weeks for temporary disabilities.
An injured employee will receive:
Medical Care
Replaced Income
Retraining Costs, if necessary
Also, if killed on the job, then eligible dependents will receive workers’ compensation for generally 500 weeks at the wage of the deceased employee.
Benefits For Your Business
Workers’ compensation insurance protects your business from a lawsuit when someone gets hurt on the job.
When you purchase Workers’ Compensation Insurance, you are purchasing protection for your business. Your business will receive many benefits that will keep it from going out of business. The different benetis are:
Protection from lawsuit or large financial loss
Coverage for legal costs
Coverage for certain types of illnesses and injuries
Coverage for funeral expenses and dependent support
Coverage for a percentage of reimbursed wages to employee
When you purchase worker’s compensation, it’s good to be aware of your state’s specific requirements and laws. Make sure you’re up to date with the current insurance policies so that if something were to happen, you know exactly what to talk to your employees about.
EZ.Insure understands that businesses need to be informed to make the best choices for their future. We provide you with a highly trained agent with your region that will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge. You will never have to worry about being hounded by endless calls when you use EZ.Insure. We promise to offer straight to the point, no-hassle, accurate quotes in order to help you protect your business. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected] or calling 888-350-1890. We look out for your business as if it was our own.
