Workers compensation coverage is an integral and legal requirement of your companies’ operations. It’s important to pay careful attention to what’s determining your premium rates and how you can ensure you’re paying what you should.
Are You Paying the Right Rate?
According to Thayer-Innes Insurance Agency, some insurance carriers fail to properly categorize worker’s activities. This type of error can have a costly impact on a company’s work comp insurance premium. The National Council on Compensation Insurance (NCC) has established different codes to categorize different occupational activities. Insurance companies use these codes to apply within coverage fields. Using the wrong activity code or applying one single activity code to the entirety of a large company’s workforce can significantly affect premiums. In turn, companies can end up paying less than they should have paid due to misclassification, and an audit could cause a company to have to pay retroactively for prior coverage periods.
What Changes Rates?
The more work comp claims that a business incurs, the more its premium cost will increase. A business work comp insurance premium can increase or decrease when their losses vary in relation to their industry code’s national average within a given time frame. If a business experiences significantly fewer claims over an extended period of time, it may see a decrease in its monthly or quarterly premium payments.