A question I was recently asked.
Workers compensation policies are subject to what’s known as the minimum premium. You can refer to the individual state authority in question for their definition of this term, however it is typically the lowest amount of which a policy can be written.
Minimum premiums are established for each classification code and are generally found in a rate and rating value table published by the advisory organization, again for any specific state in question. When there are more than one classification code on a policy the minimum will be developed from the classification with the highest estimated premium.
To properly answer this question requires more information about how the policy was originally set up. For example…was the policy only written with the owner included? Or was the owner not included? What payroll was used to establish the policy premium and where did that payroll come from? What was the minimum for the policy? By the way…minimum premiums are generally shown on the issued policy declaration sheet.
So you may get some premium back…but the answer really depends on the details or circumstances surrounding the policy you have and how it was originally set up.
Funny how what seems to be a simple question can suddenly grow into a confusing issue when it comes to workers compensation!
Be sure to ask us a question or visit our site for more information about workers compensation premium issues.
Hope this somehow helps you out!
