Difficulties with Workman’s Comp Insurance Companies
If you have ever run a business then you have had to dealwith workers comp insurance companies. Dealing with the non-stop threat of increased rates will make any business owner paranoid.
No doubt you already realize that there are many things that can occur in your business that will cause the workers comp insurance companies to raise your rates. What you probably don’t realize are that there are also numerous mistakes made by the insurer that have a adverse effect on your business. The following is a list of common mistakes by businesses and workers comp insurance companies.
The following are some common mistakes made by companies that cause workers comp rates to increase:
* No safety plan for preventing injuries
* No return to work plan
* Not informing insurance companies of injuries when they occur
* No direct communication with the doctor of the injured worker
These are only a few of the common mistakes that companies make when dealing with work comp. There are several things applicable that will help companies to lower rates with very little upfront costs. If not watched the considerations above can amount to thousands if not tens of thousands of dollars in increased premium rates.
The following list below are common mistakes made by workers comp insurance companies:
* Workers assigned the wrong job class code
* Employer’s experience modification was calculated wrong
* Proper credits and exemptions never applied
* Errors with payroll calculations
Believe it or not, these problems are only a few of the several mistakes that arise. A common problem is when the workers comp insurance company is calculating the overtime rate at the amount indicated on the payroll as opposed to a straight hourly rate.
A frequent problem is employees being put into the wrong workers comp classification category. This error can cost companies thousands of dollars. An example is a clerical worker being mis-classified under the roofing classification code because she is required to go to the job site on an infrequent basis.
If you have ever dealt with carriers you probably know how difficult it can be to get your business’ rates decreased. Even though you may be correct, you may not have the tools you need to show them the problem so that it can be fixed. Then there’s the errors that you don’t know of that are costing your business money. Errors that add up to tens of thousands of dollars each year.
Take it from me, I’ve seen it. I just recently saw a policy that had a whole host of errors that the employer was refunded $96K. Basically, the business were refunded back $16K a year foreach of the six years past. I don’t know about you but I could definitely use an extra $96K.
You probably think I am making this up but that’s not the case. That’s not even the largest refund that I have seen. On average we see about $37,000 dollars in refunds. Naturally it all depends on how much you’re paying in premiums but on average we typically recover about 10% of the premium amount.
Don’t take my word for it, try it out yourself and see.
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