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More than Insurance Comprehensive Risk Management

Workers Compensation

Workers Compensation Insurance

The purpose of workers’ compensation insurance is to provide employees with proper compensation for job-related injuries or illnesses. Although specific laws vary by state, workers' compensation insurance is generally required of companies with W-2 employees.

Many states use the standards of the National Council of Compensation Insurance to determine the rates of their workers’ compensation insurance. The NCCI, a non-governmental, private organization, uses classifications to determine the risk factors involved in particular jobs. The risk factor will obviously be greater with occupations such as mining and construction, and generally low for clerical workers.

Premiums are usually determined through a formula which includes a number of factors including salary, benefits and other variables.  A remuneration number is then arrived at.  It is used in conjunction with the risk factor classification of the job to arrive at the cost of the insurance. Premiums can also be adjusted by “experience modification factors”, which are standards set by the NCCI and other organizations for reducing premiums based on a company’s reputation.

The initial premiums are based on a number of prognostications including the amount of wages to be paid to workers.  At the end of the policy period an audit is performed to determine the actual premium amount.  The results of the audit can result in either a refund or additional premiums due.

We work with our clients to ensure they understand  workers’ compensation insurance.  We take the time to evaluate their needs and ensure employees are properly classified.  This helps to minimize any surprises later on.

To assist you in understanding workers compensation, this e-learning book from the Hartford - "Help Me Understand Workers' Compensation Insurance Enough to Feel Good About What I Buy!" is a terrific resource. 

Contact us today to find out more about how we help employers with all of their insurance and risk management programs.