Workers' Compensation Insurance discounts and questions
Pays an employee's medical bills and part of their wages when they are hurt at work, whoever was at fault, and in return the employee generally cannot sue you. Arizona, Nevada, Utah and Idaho each require it at their own employee threshold and run the system differently.
Discounts carriers commonly offer
- Experience modifier below one
- A claims history better than expected for your class reduces the rate for a business large enough to be experience-rated; a bad year raises it for three years.
- Safety program credit
- Some states and carriers credit a written safety program, drug-free workplace policy or safety committee.
- Scheduled credits
- Carrier underwriting credits for good housekeeping, training and return-to-work practices, applied at the underwriter's discretion.
- Pay-as-you-go billing
- Not a rate cut, but reporting payroll each pay period instead of estimating removes the audit bill and the deposit.
- Correct classification
- Splitting payroll between clerical and field class codes where the records support it, so office staff are not rated as tradespeople.
Questions people ask
Do I need it if I only have one or two employees?
Probably, and each state answers differently. Arizona, Nevada, Utah and Idaho each set an employee count or a type of employment at which the requirement starts, and some start at the first hire. Family members, part-timers and casual labour count in some states and not others. Rather than reading the numbers off a website, tell us who works for you and how they are paid and we will apply the state's rule; the cost of a policy for a small payroll is usually modest against the penalty for being uninsured when someone is hurt.
Can I cover myself as the owner?
In the four states a sole proprietor or partner is generally outside the system and can elect in; corporate officers and LLC members are generally inside and can sometimes elect out. Electing out saves premium on your own wages but leaves your own injuries to your health plan and disability policy, which may exclude work injuries. A general contractor will often demand that subs cover their owners, because an uninsured sole proprietor hurt on site can become the GC's claim.
What is an experience modifier?
A number that compares your business's claims over a look-back window with what is expected for the same class codes and payroll. A modifier of one is neutral; above one raises the premium, below one lowers it. Frequency counts for more than severity: several small claims move the modifier more than one large one. Suppose your class rates produce a $10,000 manual premium; a modifier of 0.85 would bring it to $8,500 and a modifier of 1.20 to $12,000, which is why a return-to-work program pays for itself.
What happens if I hire a subcontractor without insurance?
In each state, the subcontractor's employees can become your employees for compensation purposes if the sub has no policy, and the auditor will charge you premium on the sub's payroll at the end of the term. Collecting a certificate of insurance from every sub before they start, and keeping it on file, is what keeps their payroll off your audit and their injuries off your policy.
How do I report a claim?
Get the worker treated, then report it to the carrier the same day, whatever you think of the injury. Every state sets a deadline for the employer's first report, and late reporting is penalised. Early reporting also lowers the eventual cost: claims reported promptly close faster, and the carrier's nurse case manager can direct care from the start. The claims page on this site lists what to have ready.