If you own a business and hire individuals to work for you, you are required to carry worker's compensation insurance. There are many insurance companies who offer this type of insurance, so it is always advised that you call around to different companies and get price quotes. As you do so, you may begin to wonder what factors affect the price you are quoted. Obviously, the number of employees you have will affect the price you are quoted, but there are many other factors that you may not realize come into play. Here are a few of the lesser known factors that can affect the price you are quoted for workers compensation insurance.
The Industry Your Business Is In
One of the factors that heavily influences the price you are quoted for workers compensation insurance is the industry your business is in. A construction company will pay more for workers compensation insurance than an accounting firm. This is because construction workers are more likely to be injured on the job and have more severe injuries than an accountant would.
Where Your Employees Work
Another factor that affects your workers compensation insurance price quote is the exact location your employees work at. You may have employees that work in a region where robberies happen often, putting your employees at risk. You may have a business in a part of the country with strict workers compensation laws that cause premiums to be higher. Or you may allow your employees to work from home, which decreases your rates. Where your employees work has a direct affect on your premiums.
How Much Your Employees Earn
When you get quotes for workers compensation insurance, you may be asked how much the average employee in your company makes. If your company employees high wage earners, you may be quoted a higher premium amount compared to someone who employees minimum wage employees. If an employee goes out on workers comp, they earn a certain percentage of their wages. This percentage is set by the state your employee is employed in, but is typically 2/3rds of their salary. The higher their salary, the more insurance will have to pay them.
How Many Claims Were Filed By the Previous Owner
Lastly, if you have purchased a business from someone else, their workers compensation claims may follow you. If they had an above-average number of injured employees, you can expect to be quoted more for your insurance policy. Likewise, if they had low numbers, their good fortune may also follow you around and you may be quoted less for workers compensation insurance.
There are many factors that affect how much you are quoted for workers compensation insurance. Learning what these factors are will help you understand more about the price quotes you are receiving.Share