Steps You Could Take To Lower Workers Comp Premium | Insurance Incorporated Skip to main content

Steps You Could Take To Lower Workers Comp Premium

By July 27, 2011June 8th, 2020Insurance

 

Workers’ compensation insurance can get very costly and often could threaten the survival of some small businesses. In California, by law, it is required that all businesses who have employees must carry workers’ compensation insurance. It is stated by the Department of Insurance that the “employer will be enjoined (prevented) from doing business. Mandatory penalty upon issuance of stop order is $1000 per employee. Failure to obey a stop order is a misdemeanor; penalty is up to $10,000, imprisonment up to 60 days, or both. $500 penalty for failure to respond to Director’s inquiry. Upon final adjudication of a claim, the uninsured employer shall be assessed: (a) in noncompensable cases, $2,000 per employee employed at the time of injury, or (b) in compensable cases $10,000 per employee employed. The maximum shall be $100,000. Payments are credited to the Uninsured Employer Fund of the State Treasury.”

As you may or may not know, workers’ compensation is based on your payroll, which is multiplied by a rate that is relevant to your specific industry, or class code. An industry with higher risks of injuries will tend to have a higher rate than those that have a lower risk of injury. Also, it is based on other factors, such as, claims history, industry experience, etc. That being said, depending on your type of business, workers’ compensation, again, can be very costly. Here are a few tips you could take to help lower your workers’ compensation costs:

1. Implement a effective safety program

2. Fix dangerous environment and/or conditions of workplace

3. Remodel hiring practices

4. Train supervisors

5. Report and supervise employee injuries

6. Exercise medical provider networks

7. Utilize a Return to Work program

8. Maintain strong communication with employees

Check back for a more detailed description of each tip in future posts. There are many topics to be discussed about each one.