As a new employer, preparing your business for handling workers’ compensation insurance can be intimidating, but careful planning can prevent costly issues in the future.
Be Prepared
You’ll need to acquaint yourself with the way workers’ compensation is regulated in your location since the rules and guidelines differ from state to state. Whether coverage is necessary may depend on the type of business you have and the number of workers you employ. Identify the governing agency for your area and familiarize yourself with the way payments are calculated. Make it a priority to find a good insurance broker knowledgeable with this type of coverage.
Partner with Your Insurance Agent
Work closely with your insurance agent to accurately classify your type of business. In preparing for this meeting, you’ll want to ensure you have clear-cut job descriptions for the roles and functions of each of your employees. Workers’ compensation coverage typically falls under the category of commercial or business insurance, and choosing an agent who is an expert in this field will save you costs in the long run. Your rates will depend on the classifications being correctly assigned so a meeting with your agent to discuss these will be worthwhile. There are a large selection of classifications offered, which can make this process seem daunting. Discussing any concerns you have over the clarification of an employee’s job responsibilities can make the process go a bit easier.
Calculating Costs
In Texas, costs can be based on relativities or on loss costs. Your insurance agent can help you understand the method used to calculate your workers’ compensation insurance premium. Wages and salaries for your employees should be carefully forecasted to prevent surprises in expense. Later in the year, if you find your payroll is surpassing forecast, you’ll need to contact your insurance agent to discuss whether adjustments need to be made as a result. You’ll also need to be aware these estimates are for 12 months and that time frame begins on the date you initiated your policy. It is easy to forget that many times this may not line up exactly to your company’s fiscal year.
Keeping It All in Check
Maintain detailed payroll records and compare your forecasts from time to time to be sure you are still on track with your projections. Be thorough in reviewing these records. It is essential to periodically evaluate your workers’ compensation audits, as well as the workers’ comp insurance payment estimates, and note any inconsistencies. Contact your insurance agent to discuss any discrepancies. Being conscientious in this effort can help prevent costly mistakes down the line. If you need a good insurance broker in Dallas, TX, for workers’ compensation insurance, contact us. We have 19 years’ experience in the insurance industry and will work o diligently provide you with the best possible coverage.