Business Insurance Packages: Saving time & money
Companies typically need several types of business insurance to be fully covered in the event of an accident. This includes various business owner’s policies including, General Liability Insurance and Workers’ Compensation insurance, as examples. To help you fully understand what goes into finding a great insurance policy, we want to share with you a few key areas of focus when researching different types of business insurance. In the next few paragraphs, we want to explain what policies are important for your company and why.
General Liability Insurance
It’s often necessary to have General Liability Insurance (sometimes referred to as Business Liability Insurance) for your company because it protects you from a wide variety of claims, depending on your company’s unique risks.
These claims include bodily injury, property damage, medical payments, damage to premises rented to the company and others that can arise from your company’s operations.
Small business owners need some form of general liability insurance to safeguard the company’s livelihood. A single accident could possibly result in a lawsuit that the company may not be able to afford. The best way to protect against this is to make sure you have liability coverage that matches your level of exposure.
Because there are so many different policies, shopping between different insurance providers and carriers is a great way to make sure you’re getting the best coverage at the best rates. As with most insurance policies, various factors influence the cost of a general liability policy. By combining your coverages through a payroll and HR outsourcing firm, you can consolidate your billing and likely see better rates than standalone policies.
Worker’s Compensation Insurance
Next, let’s look at Workers’ Compensation Insurance. Workers’ compensation insurance is required by law and each state’s requirements may vary significantly. Workers’ compensation insurance, also known as workmans’ comp, or workers’ comp insurance, provides benefits to employees who incur work-related injuries or illnesses and can help protect your business and your employees in a number of ways: by supporting your company, promoting employee safety and well-being, and helping get personnel back to work as soon as reasonably possible. If an employee can’t return to work, workers’ compensation insurance coverage can also provide a long-term benefit.
For an example of workers’ compensation insurance coverage, say an employee slips on ice and injures himself on the stairs leading to the office. Let’s say he then requires an emergency room visit or even weeks at home recovering, for example. With workers’ compensation insurance, the medical costs are covered and insurance provides a financial benefit while the worker recovers. Workers’ compensation will also help employees keep their income while they take time off to recover from an injury.
Another example would be if an employee injures her back trying to lift a heavy box of office supplies, like printer paper, and subsequently needs to see a doctor, take medication, or maybe have physical therapy to recover. All of these situations would be covered by your workers’ compensation policy. You’re also covered if an employee is involved in a car accident while conducting business operations.
These benefits typically include medical care, such as doctor visits, hospital visits and/or surgeries, physical therapy, or other forms of therapy as well as wages from lost time at work.
How much does Workers’ Compensation insurance cost? It’s fairly simple to get a quote for workers’ compensation insurance for your company and employees, and it can oftentimes be done over the phone or online.
The cost varies by state and can also vary between different insurance companies. However, all insurance companies base Workers’ Compensation premiums on the amount of the company’s payroll plus how dangerous the work is that the employees do. Past claims experience (how many claims, how severe the injuries, how costly the claim, etc.) will also impact the cost of workers comp coverage. For better claims history, you may get premium credits, but will likely have increased premiums for poor claims history.
When determining the premiums of a policy, workers comp carriers take two major things into account.
1.The Workers Comp Classification Code
The classification code for a company is determined by the type of work performed by its employees. Different types of work are charged different rates, and each state provides the basis for rates by a classification code.
2.The Experience Modification Rate
The experience modifier is determined by the company’s insurance claims history and is calculated by the state bureau and shared between all insurance carriers. When a company is first started and requires a workers’ comp insurance policy, their experience modifier starts at 1.o, which is considered average. A good claims history would likely generate an experience modification number below 1.00 while a company with a higher history of claims may have a mod rate greater than 1.00.
If you’re unsure of your class code and experience modifier, you can look at your current policy to find the information needed to understand your coverage and/or shop for better rates with different providers.
Business Insurance Policies
Small and mid-sized companies can purchase a business owner’s policy to combine protection from all major property and liability risks into one package for the owner(s) of the company. While these coverages can be obtained separately, it’s often beneficial to package insurance policies together, as it results in better savings as well as consolidated billing from one carrier.
If you’re the owner of a business of any size, you can’t afford to not invest in business insurance to keep you covered from liability in the event of accidents, injury, damage, or any other unforeseen situation. For more information on packaging different types of business insurance such as workers’ comp and general liability, reach out to Maverick HCM today.