Whether you own a small, moderate, or big business, it’s more likely that you will require workers’ compensation insurance for your employees. Workers’ compensation rates are a necessary and valuable cost for employers, especially considering how much a workers’ compensation insurance policy costs.
If your employees sustain an injury or fall ill while on duty, workers’ compensation benefits help cover lost wages, medical bills, funeral-related expenses (in the case of wrongful death), and disability payments. In cases where the family of an employee files a claim against the employer, workers’ compensation also helps cover your business’ legal costs.
Worker compensation rates are determined by your state’s rating bureau or agency and are based on various factors. If you need help calculating your workers’ compensation costs, contact the Phoenix Workers’ Compensation Attorneys at Snow, Carpio & Weekly, PLC.
Workers Compensation Rate Explained
A workers’ compensation rate is considered the base price of an insurance plan, which is predetermined by the state and used in calculating your total premium amount. The rates can vary from one state to another and are commonly based on several factors, such as:
Ø Regional healthcare costs of workers’ compensation claims
Ø The number of workers’ compensation claims that are being awarded or filled
Ø Costs per claim paid out and days of work or payroll missed by the injured workers.
While the rates are designed to be per each class code, rates across states are often lowered and raised at the same time or as a percentage. The adjustment of these rates is developed to reflect changes in the worker compensation system’s performance in each state. Lesser claims or lower healthcare costs, for instance, can result in enhanced workplace safety.
Your True Workers’ Compensation Cost
According to a study published by the Oregon Department of Customer and Business Center, in general, average premium rates may range from under $1.50 to about $3. Don’t let the numbers deceive you. Workers’ compensation insurance rates are categorized as cost per $100 on your payroll. For instance, a rate of $1.58 means a business with $100,000 in payroll would pay $1,580, annually, in worker compensation premiums.
This rate, however, will only give you an estimate of your workers’ compensation costs, not an accurate quote. Additionally, in most states, insurance companies are allowed to drift from the “required rates” given by the state’s rating agency.
The claims can also vary significantly from one company to another, as they consider other factors — such as experience modifier, premium credits, number of claims previously filed, and debits or credits. Typically, workers’ compensation costs follow a simple formula:
(Workers’ Compensation Rate × Payroll) × (Debits or Credits) = Quote Insurance
To save money on your workers’ compensation policy, talk to a Phoenix Workers’ Compensation Attorney for programs and advice or training, which might qualify your business for some savings.
Contact Snow, Carpio & Weekly, PLC
While considering the best choice for workers’ compensation insurance, contact the Phoenix Worker’s Compensation Attorneys at Snow, Carpio & Weekly, PLC. With more than 100 years of combined experience, they serve each client with confidence.