Unanticipated workers' compensation insurance increases can be costly to your bottom line. While some aspects of work comp are out of your control, there are steps that your business can take to save money and lower workers' compensation insurance costs.

Analyze Estimated Annual Payroll Totals Carefully

Your premiums are closely tied to your estimated annual payroll costs. Looking closely at your estimated annual payroll costs will help you find ways to lower workers' compensation insurance. You should do your best when estimating, but you are not expected to have exact figures, either. Overestimating your payroll can result in over payment of your workers' compensation insurance and there is no guarantee that you will get this money back. Underestimating your payroll figures can result in owing a large sum in overpaid premiums!

Examine Detailed Employee Payroll Reports Regularly

Always use correct workers' comp job codes for employees. Job codes can vary greatly, and you could be paying too much or too little in if your employees are not coded correctly. For example, an employee who performs roofing and trim carpentry work will cost you more if you code him only as a roofer - the rate is much higher. You can lower workers' comp insurance costs by coding his carpentry time correctly. For audit purposes, keep accurate records. Never over report at lower rates, this is considered fraud.

Outsource Your Payroll To Qualified Specialists

Sometimes, the simplest solution is to outsource your payroll tasks. Skilled payroll processing companies are trained and educated to calculate your work comp premiums accurately. A payroll company will not just calculate your state's workers' compensation amounts- many are set up to automatically withdraw the funds due to pay the work comp premiums and will actually write and send the check on your behalf.

Seek An Employee Leasing Service To Lower Workers Compensation Insurance and Simplify Employer Responsibilities

An employee leasing company can make your role as an employer even easier. You can relax and spend more time focusing on your business and the actual management of your employees. Employee leasing companies can take over the responsibility and burdens of worrying about high work comp costs and in many instances, they can drastically lower workers' compensation insurance premiums.



Article Source: http://EzineArticles.com/?expert=Mike_Burgelin

What is workers' compensation insurance?

Workers' compensation insurance covers your employees' medical and disability expenses related to work-related illness and on-the-job injuries. Employers' liability coverage, which is normally included on a workers' comp policy, protects your company by paying legal fees and any awarded settlements should an employee sue you, claiming that an illness or injury was caused by your company's negligence or failure to provide a safe workplace.

How do I know if I need workers' comp insurance?

Workers' compensation insurance is required by law in most states for companies that have W2 employees, and in some states for 1099 contractors. Regardless of state law, clients often also require in their contracts that their contractors carry workers' compensation insurance.

What are the workers' compensation laws for each state?

It's important to know your employer rights as well as the laws governing workers' comp in your state. Workman's comp is regulated by each state's department of industrial relations, department of labor, department of insurance, department of employment, bureau of workers' compensation, or a similar state agency. TechInsurance provides links to each state's insurance web site for quick access to detailed information about workman's compensation laws.

Do I have to carry workers' compensation insurance if I don't have employees?

If you have a one-person company, you may be operating in a state that does not require that you maintain workers' compensation coverage. However, your client may still require that you carry workers' compensation insurance. Why? In many states, unless a company can show that subcontractors carry their own workers' compensation insurance, subcontractors will be automatically covered under the hiring company's policy, at the hiring company's expense.

Do I still need workers' comp insurance if I use contractors instead of employees?

Contract employees, leased employees and some other work-for-hire situations may be exempt from workman's comp insurance requirements, but some state laws do require companies to cover 1099 contractors. When you hire independent contractors to do work for you, you should require that they carry their own workers' compensation, or assume that you will have to pay additional premium to cover the subcontractor on your own policy.

My state requires me to carry workers' compensation insurance, and so do my clients. But what's in it for me?

Workers' comp insurance medical benefits pay for doctor's visits, medication, diagnostic tests, therapy or hospital stays that are directly related to an accident or injury that occurred while the employee was on the job. Additionally, the policy will reimburse the employee for a portion of income lost due to work-related injury or illness. If the worst should happen and an employee is killed on the job, the insurance will pay death benefits to the survivors, as well as some funeral expenses. So, if your employee is hurt on the job and you have workers' comp coverage, you won't have to worry about paying those costs out of pocket.

There's another important benefit for you as an employer: The employment liability coverage included with your workers' comp policy protects you from paying high lawyer fees or big settlements if an employee claims that your negligence, carelessness or failure to provide a safe working environment caused an accident or injury.

Do I have to pay for workers' comp coverage for myself?

In some states, owners, officers, partners and other company principals can exclude themselves from their own companies' workers' compensation coverage. If you've got good health insurance and disability insurance policies, consider your risk low, and want to save on premiums, this may be a good choice for you.

What if I want to cancel my workers' comp policy?

In virtually every state, the insurance company can charge and retain a minimum premium when a workers' compensation policy is cancelled. So, if you buy a workers' compensation policy and cancel it two months later, you will still owe the minimum premium, which can be much more than the cost of two months of coverage. In some states, the minimum premium can run from several hundred dollars to more than $1,000. So, read the fine print before you decide to cancel your workers' compensation policy, and be sure it will actually save you money.

What's a premium audit?

Your workers' compensation premium depends on the number of people you employ and what risk classifications those employees fall into, based on each person's scope of employment. To determine these numbers, your carrier will conduct an annual premium audit and set your company's workers' compensation insurance premium for the policy period accordingly. It is important to note that during the audit period, the carrier may adjust the premiums and findings from current period and make that adjustment retroactive to cover the employees and risk classifications that were incurred during your previous policy period.

What can I do to minimize my premium?

Audit mistakes can cause you to lose coverage or can unnecessarily inflate your company's workers' compensation insurance premium, so it's important to prepare. Designate a knowledgeable contact person for the auditor who is familiar with your employees' work. Be sure to provide accurate and detailed information, because without it, the auditor may assume the worst-case scenario for risk exposure and increase your premium. Review your payroll documents to make sure that they will allow the auditor to readily break out overtime pay and discount it back to straight time, as is allowed in most (but not all) states' workers' compensation rules. Your payroll records should also reflect the actual hours spent by each employee in each of the different workplace exposure categories. Otherwise, all of the employee's payroll will go into the most expensive classification applicable. If your company uses 1099 subcontractors, show the certificates of insurance documenting that they have their own workers' compensation insurance.

What if I have employees in multiple states? (OK, make that Top 11 Questions.)

It is very important to break down your payroll by state. If you do not provide the insurance company with accurate information about payroll you have in each state where work is done, the insurance company will very likely not pay claims that occur in unreported states, even if the total payroll on your report is accurate. Be sure the person handling the audit in your office is aware of and has access to accurate information on out-of-state payroll, and that the audit is fully completed.



Article Source: http://EzineArticles.com/?expert=James_Cochran

Your workers' compensation insurance costs are tied to your company's risk. The more risk of insurance claims, the higher premiums you can expect to pay. Creating a company safety program is a proactive way to lower workers' compensation insurance by reducing your risk of claims.

Company Safety Program Suggestions

* Delegate a safety coordinator or team to create a program with training to prevent accidents and injuries from occurring- as well as how to handle them when they happen. A company safety program will lower workers' compensation insurance claims when employees are educated about potential safety risks and adhere to safety policies.
* Outline procedures for the proper use and maintenance of machinery/ tools with lock-out procedures for any that may need to become immediately unusable.
* Provide personal protective equipment to protect employees from harm on the job. For some businesses this may require only protective eye-wear. Other businesses may require hard hats, ear plugs, gloves, etc. If you want to see lower workers' compensation insurance premiums, enforcing a PPE policy is a must.
* Create a job site checklist for monthly site inspections to ensure that there are no avoidable safety hazards and all safety rules are being followed.
* Set up a safety bulletin board with safety documents for employees. A visible record of days since last accident is another way to lower workers' compensation insurance by encouraging employees to keep the number going by avoiding possible accidents.
* Conduct monthly safety meetings. To help ensure compliance, request employees sign a form after attending or when presented safety policy documents. Safety meetings can be a great opportunity for employees to become more involved with workplace safety improvement.

Designing a company safety program and giving your employees a copy of the policy documents is not enough. Enforcing your safety program rules and requiring complete adherence is an imperative step to lower risk and ensure lower workers' compensation insurance claims.

If your business does not have the resources or expertise for a company safety program, there is an affordable solution. An employee leasing service, also known as a Professional Employer Organization or PEO, has properly trained and educated professionals that will design a safety program appropriate for your company. In addition, an employee leasing service can also lower your workers' compensation insurance costs by up to 40% compared to traditional or state insurance carriers. PEO services will also manage your workers' compensation claims, identify potential loss exposures and conduct fraudulent claims investigation to keep your costs under control.



Article Source: http://EzineArticles.com/?expert=Mike_Burgelin

Many Montana businesses are gasping for air and struggling to survive in what is still a slow-to-recover recession. As Montana businesses are trying to maintain operations and wait out the storm, the mandatory costs associated with paying employees is intimidating. One payroll cost that is out of control is Montana workers' compensation insurance premiums. In 2008, it was reported that Montana workers' compensation insurance is the second highest for workers compensation premium rates in the United States.

Because of the slow improvement of the Montana economy, businesses are seeking effective ways to reduce Montana workers' compensation insurance premiums and other employee-related costs, while still being able to promote growth and productivity. With the "Montana Professional Employer Organizations and Groups Licensing Act", the Montana legislature has expressed that using PEO companies, also known as employee leasing services, may be the light at the end of the tunnel and that "there is a public need for these professional employer services."

What does this mean for the average Montana employer? Professional Employer Organizations can save employers a huge percentage on their workers' compensation rates. When obtaining Montana workers' compensation insurance on their own, small businesses are faced with paying extremely high premiums, much of which is required up front in the form of a deposit or down payment. Using a PEO service, employers are able to have their work comp purchased through a master policy, combined with thousands of other employers. Doing so allows for substantial rate reductions, resulting in the ability to save significant amounts on the cost of Montana workers' compensation insurance. For some Montana businesses in high risk industries such as forestry service and roofing, this can be as much as $10,000 a year or more in work comp yearly premium savings.

When Montana employers are able to pay less on insurance costs, they are able to operate their business more competitively and attain more work then their competition. Using PEO services is almost a necessity for employers searching for ways to save money on Montana workers' compensation insurance and other payroll costs.

Choosing a PEO is a struggle in itself though if you are going at it alone. Obtaining quotes is time consuming and stressful. Finding a PEO broker who has access to hundreds of individual PEO companies and specializes in finding the best PEO service for each business' individual needs is crucial to getting the most out of using professional employer services.



Article Source: http://EzineArticles.com/?expert=Mike_Burgelin

While still facing the effects of the economic downturn of the 2008-2010 recession, North Carolina small businesses are struggling just to survive and stay afloat. For many companies in the state, just paying mandatory employee-related business expenses is a stressful obligation. Next to maintaining inventory, one of the highest costs to run a small business in NC is the expensive mandatory costs associated with payroll. These mandatory expenses include the costs of state and federal taxes as well as one of the hardest hitting mandatory payroll expenses- workers' compensation insurance.

Regulated by the North Carolina Industrial Commission, the North Carolina Workers' Compensation Act states that all employers within the state whom maintain at least 3 or more employees are required by state law to carry workers' compensation insurance. This mandatory law has been in effect for many years but recently because of the poor economy and rising work comp premiums, it is causing employers struggling to afford their employees very few options. Many see no choice but to lay off workers or find other ways to lower their North Carolina workers' compensation insurance premiums.

Small business employers would prefer proactive methods to lower North Carolina workers' compensation insurance premiums while maintaining their labor force. Employee leasing companies are providing the solutions NC companies need. These companies are being utilized more frequently as the best way to reduce North Carolina workers' compensation insurance costs without reducing staff. When small businesses utilize this option, they are able to save thousands of dollars each year and not only maintain the employees they have, but become able to hire more and increase productivity.

The best savings, sometimes as much as $10,000+ each year, are being seen by companies that employ labor in high risk industries and use work comp job codes for their employees classified as high risk. These savings translate into significantly lower labor costs and give businesses the opportunity to make more competitive business decisions and get ahead of their local competition.

Employee leasing companies, also known as Professional Employer Organizations, are able to provide savings by grouping thousands of North Carolina small businesses seeking the same work comp solutions together into a master policy. This allows for serious rate reductions that many average small businesses never see when obtaining an workers' compensation insurance policy on their own. One downside, however, is that there are many Professional Employer Organizations- and it can be overwhelming trying to pick the best one.

An employee leasing or PEO broker can help many businesses pick the right Professional Employer Organization. These educated professionals can answer questions about employee leasing and PEOs- as well as find a company for your business that will offer the best savings on workers' compensation insurance. They have access to hundreds of state-approved employee leasing companies and their job is to make sure you are set up with one that is not only approved by your state, but is also the best fit for your company. In addition to North Carolina workers' compensation savings, these brokers have access to other employee-related cost reducing options businesses can use to save money.



Article Source: http://EzineArticles.com/?expert=Mike_Burgelin