Workers comp rates continue declining in Kentucky, but do you have the best program for your business? Let’s review the five tips to lower your Workers’ Compensation Rates.
I am Adam Sheridan with Reed Brothers Insurance and one area of insurance we focus specifically on is workers’ compensation. From one-man shops to businesses with hundreds of employees, we’ve built insurance programs for each level of your business.
If you watched our last video, you saw that workers comp rates are headed for a decrease again in 2023. While that’s good news for you, there’s still a chance you’re leaving money on the table. How can you fix it? Let’s countdown the top five tips to lower your workers’ comp rates.
#5 – Review Your Workers’ Comp Audits With Your Agent
Across the US, over 60% of workers comp audits are incorrect on average. In the past few months, I feel like 80% or more of the audits I’ve looked at have been incorrect.
How can your audit be wrong?
- Employees are classified incorrectly
- Owners and/or officers get included when they should have been excluded or vice versa
- You or your CPA simply didn’t complete your audit. As a result, your insurance company estimated your audit, and sent you a bill.
The point is…don’t take your audit at face value. Review it, discuss it with your agent, and see if changes need to be made. You can dispute the audit with your workers’ comp company. As long as the proper documentation is provided, there’s a chance your bill can be revised.
#4 – Make Sure Your Employees Are Classified Correctly
Workers’ compensation companies charge a set rate based on the type of work and class code assigned to each employee. Just a quick look at your policy will show you how dramatically different rates are for each class code. We have saved clients thousands of dollars simply because the wrong class code was being used on a policy. It’s important to have accurate, up-to-date job descriptions for your employees, and provide those to your agent to get this part right.
#3 – Take Advantage of Workers’ Compensation Discounts
Depending on the industry you’re in, the industry associations you belong to, the premium you pay, the employee practices you have in place, the insurance company you’re with, and so on, you may be eligible for additional discounts on your workers’ compensation policy.
For example, if you own a restaurant or chain of restaurants and are a member of the Kentucky Restaurant Association, you may be eligible for a 10% discount on your policy depending on the company you’re with.
If your business is a Chamber of Commerce member, you may be eligible for a 10% discount on your policy depending on the industry you’re in, what your claims history looks like, and what workers’ compensation company you are with.
You may even qualify for a drug-free workplace credit depending on the workplace practices you have in place.
#2 – Choose The Right Workers’ Compensation Insurance Company
Kentucky is a SUPER competitive marketplace for workers’ compensation. Depending on your type of business, claims history, and other factors, insurance companies will sometimes look to get aggressive in the pricing they offer you to earn your business.
The bigger picture here goes beyond the pricing though. Certain workers’ compensation companies offer additional services to their policyholders such as Nurse Triage which can help lower the overall cost of claims, Human Resource consultations, risk management, loss control, and many more. While the companies that offer these services may not get you the bottom dollar price you’re seeking in year one, they can help set you up for success in the long run to maintain an overall better-priced policy.
#1 – Shop Your Workers’ Comp With An Independent Agent
This one is my favorite for obvious reasons, but you need to be shopping your workers’ comp with an independent agent. Work with one that has experience in this field and has access to a variety of companies. That doesn’t necessarily mean you work with Reed Brothers. Your business might not be the right fit for our agency, or we may not be the right fit for you.
You need an agent you can work with on your audits, understand the marketplace, and have good relationships with their companies so they can pair you with the right program. Remember, the goal here is not just to get you the lowest premium this year, but it is to set your business up for long-term success so that your workers’ compensation program is better than your competition and better than your industry peers.
Next Steps
If you own a business and have employees in Kentucky, and have more questions about your workers’ comp insurance program, give us a call at 606-679-6311 or email me at asheridan@rbisomerset.com. You can also visit our website at rbisomerset.com anytime. Thank you, and we look forward to working with you.
