Business owners in all states (except Texas) are required to carry workers’ compensation based on the number of employees.
Each industry or business has been assigned a classification code for purposes of workers’ compensation. There are approximately 700 class codes throughout the country and the description may vary slightly by state. Typically they are 4 digits except Pennsylvania which are 3 digits.
Example: ABC Plumbing Co. has 2 classifications for their employees, plumbers and office staff. To determine an estimated premium, first, divide the base rate(s) by 100 and then multiply by the estimated payroll.
Depending on the insurance company or agent, the most common payment method is referred to as direct bill. This requires a deposit or down payment and monthly installments.
The other option is referred to as Pay As You Go, which reduces or eliminates the typical down payment and allows business owners to pay their premiums based on their actual payroll each cycle.
Complete a short questionnaire online or fact finder to provide the necessary information. If you have a policy in force, provide us a copy of the client’s current policy. Additional information may be required based on your industry type and years in business.
If the business has workers’ compensation in place, we may need a supplemental application specific to the industry, loss history reports and other related documentation may be requested. If the applicant is a new business, we may need a No Loss Letter.
Workers’ compensation is one of the few insurance coverages that provides detailed descriptions of injuries to employees. The insurance provider will only send the report per request and sometimes takes a few days to obtain. The report can also be referred to as Loss Run Report or Current Injury Report.
It is optional and the rules vary by state. If the officers elect to be included the insurance company has a minimum and a maximum payroll exposure. Officers may exclude themselves by completing a form or online application and pay an annual fee.