Workers' Compensation or Employer’s Liability is required by most state laws.  Even if you have a small business and aren’t required to carry work comp it is a good idea. Without work comp insurance you can lose your business if an employee sues you after being hurt while on the job.

Civil penalties from the State of Kansas against the employer are $25,000 or twice the premium the business would have paid (whichever is higher) if you are required to have work comp and don’t.  If an employee sues and wins (which is likely), punitive damages can be assessed.

In Kansas, if you have payroll of $20,000 a year or expect to have that much, you are required to carry workers' comp.

There are many actions you can take to legitimately lower your work comp premiums, for example:

• Keep detailed job descriptions and assign a  limited number of workers to the most costly types
• Keep payroll records by job type and duties
• Have written safety procedures for employees
  
• Conduct regular safety meetings and document attendance
• Encourage employee feedback and involvement
• Consider a deductible
  
• Report all claims promptly – immediate response reduces claim amounts
• Have a reporting plan in place and pre-select a doctor or clinic for initial treatment of any reported injuries
• Work with the loss control department of your carrier to minimize situations that can result in claims

Aren't all rates the same?

The basic rates for all types of occupations are set by the National Council on Compensation Insurance (NCCI), but each insurance company has a loss cost multiplier that is applied to the NCCI rates to determine the premium (higher or lower).  The premium is further modified by your loss experience and your experience mod.

An experience modifier (or experience mod) is the factor that is applied to your premium as a result of your claims experience.  It is based on the size and frequency of claims in relation to your premium and the average claims for your industry in your state.  It is set by the NCCI.

A loss cost multiplier is the factor that insurance companies apply to the NCCI base rate to either raise or lower the base rate.  Obviously, if an insurance carrier has a lower loss cost multiplier, your premium will be lower.  We work to find you a carrier that has a lower rate and has expertise in your industry.

Workers' compensation premiums are based on estimated payroll.  At the end of the policy year (in most cases), the insurance company checks with you to see what your actual payroll was.  If your payroll was less than the estimate, you receive a credit.  If your payroll was more than estimated, additional premium for the preceding year is due and must be paid.  It is a good idea to come as close as you can in estimating your actual payroll for the year, otherwise you can end up paying a big audit premium.  See how to prepare for an audit for additional information.

With our agency experience in workers' comp, we stay current with changes in workers' compensation laws and industry changes. We work hand-in-hand with our agency partners to find you workers' comp coverage at an affordable price.