Why should an employer review his workers compensation policy declaration page when he receives a new policy or a renewal?
Would you really be surprised at how many clients never read or review let alone open their workers compensation policy when they get it in the mail? It’s a question we ask all new clients and I can tell you the number of folks who don’t even open the envelope is astounding! I’d think it would be the first thing you’d do…check over the information that’s on the issued policy…you may just catch a premium audit error before it happens! Hmmm…
The declaration page of a policy is chocked full of important information like:
- The insured’s name and mailing address;
- The name of the insurance company;
- Federal ID and Bureau ID;
- The policy number;
- The policy period;
- The estimated annual standard premium;
- Premium discounts;
- Expense constant;
- Taxes and surcharges;
- Employer’s Liability Limit;
- Classification codes and descriptions;
- Location address;
- Estimated premium basis;
- Rates per code per $100 of remuneration;
- Estimated annual premium per code;
- Experience modification factor;
- Other rating modification factors;
- Modified Premium;
- And the Deposit Premium.
A quick review of the issued policy declaration page may quickly identify errors made in the issuance of the policy. It’s a great chance for the employer and insurance agent to catch mistakes that can be easily corrected. These errors may, if left uncorrected, lead to costly adjustments during the premium audit. Mistakes in the classification code assignment of payroll may add to the cost of the policy when discovered; Errors in the application of the correct experience modification factor may create additional premium at audit; Earned premium credits may have been left off the issued policy costing the employer reduced premium costs; Incorrect identification information like using the wrong Federal ID or Bureau ID may lead to statistical reporting errors.
So just take a few minutes to look over your workers compensation policy. If you find a mistake or don’t understand what you’re looking at contact your insurance agent for help! And if you need additional help be sure to contact an independent workers compensation consultant.
Hope this helps you out! Thanks!