Why should you work to make your workers compensation insurance program as attractive to insurance companies as possible?
Let’s do a list!
- The more attractive your program the better pricing you will receive. (Insurance carriers apply credits to policies, known as scheduled credits, for those employers who demonstrate in-place procedures that make a positive impact on the profitability of a workers comp policy.)
- More insurance carriers will want to write your workers compensation policy creating a competitive environment.
- You may get to chose the best fit program for your business from a variety of insurance company proposals. (There are differences!)
- You will have a better opportunity to be presented with a variety of policy and program options to consider. (Deductible plans, payroll reporting plans, and others)
- You may insulate your program from increased pricing and decreased availability. (Otherwise known as a hard market, an insurance industry cycle usually brought about by difficult or problematic financial times)
As you see most of the reasons for making your workers comp program as attractive as possible surround pricing and availability considerations. And these may have a positive effect on your businesses bottom line.
What makes an employers program attractive?
Let’s do another list!
- The employers workers compensation policy history is profitable. Believe it or not insurance companies are in business to make money and the more profitable an employers program the more positive attention they get.
- The employer demonstrates control over their workers comp program by having written reporting and incident investigation procedures in place.
- The employer demonstrates a safe workplace by implementing and maintaining an active safety program.
- The employer maintains credit experience rating modification factors (EMR) below unity of 1.0. It’s important to gain and maintain as much control over your EMR or experience mod rate as possible. Work with an independent workers compensation consultant to better understand your EMR.
- The employer shows stability and loyality with carriers evidenced by multi year policies with the same insurance company. Employers who bounce around from carrier to carrier year after year are not looked on in a positive way by insurance companies. But that’s another topic for another time.
The Take Away: Employers who demonstrate a positive history of control, profitability and stability will have the greatest opportunity to secure the best workers compensation policies for their business.
Hope this helps you out! Thanks for reading!
