Guide to Meeting Workers' Comp Requirements

Shop for the best price then get an audit to save costs
By Chris Caggiano

Workers' compensation insurance covers employees who are injured or become sick during work activities. Most states require businesses to have coverage. Because each state has different policies and procedures, it's important to investigate requirements in every state in which your employees live, work, or travel.
Some states require you to buy coverage through state-operated funds, while others allow you to buy either from state funds or from independent operators. Workers' comp rates are rising faster than those for any other insurance coverage, but there are ways to keep your costs down:

Shop around to find the best coverage for your company
Focus on prevention to keep premiums down
Consider bringing in an outside firm to audit your coverage for savings

Action Steps
The best contacts and resources to help you get it done

Find your state(s) requirements
Requirements vary by state, so make sure you investigate each state where you have employees.

I recommend: Use this list of the workers' comp authorities in all 50 states and DC. For information on workers' comp rules in general and how your state might differ, check out the site for National Council on Compensation Insurance.

Contact providers
Some states require you to obtain coverage through their state-operated funds, but others allow you to choose your coverage. If your state allows you to choose, ask your other insurance carriers if they offer workers' comp and whether they provide any package deals.

I recommend: To receive quotes from multiple carriers, use this quote-request form at BuyerZone. If well-known brand names make you comfortable, you might consider contacting some of the big names in insurance – Travelers, Fireman's Fund, Liberty Mutual, The Hartford, CNA – all of which provide workers' comp coverage. Or try Insurance Noodle a specialist in small business insurance lines, including workers' comp.

Consider a workers' comp audit
Auditors will check your insurance bills against your internal information to find areas in which you may have been overcharged.

I recommend: Check out workers' comp auditors like those of Revenue Recovery and Business Planning Group or WCA Cost Recovery Consultants. Or ask your accountant, lawyer, or banker for referrals.

Implement workplace-safety policies and procedures
When it comes to workers' comp, prevention is the best medicine. Establish safety programs and drug-free workplace policies..

I recommend: Use the extensive workplace safety checklist from Nonprofit Risk Management Center. For information on setting up a workplace-safety policy, see BizFilings.com. Contact the Occupational Safety & Health Administration (OSHA) and the National Institute for Occupational Safety and Health (NIOSH) to find information about particular workplace issues, whether it's hazardous substances that your employees regularly come in contact with or health issues that commonly affect your industry, such as carpal-tunnel syndrome.
Tips & Tactics
Helpful advice for making the most of this Guide

Check with your trade or business association to see if you can get a better rate through them.
You might have "employees" that you're not aware of. Investigate any uninsured contractors or subcontractors that you might be responsible for.
Ask your insurance company if you can pay as you go, rather than pay in one lump sum. More and more insurance companies are offering this service.
Check out discounts for "good behavior." Some carriers offer discounts of 5% to 15% if you have few, small, or no claims in a given year, or if you've implemented workplace safety or drug-free workplace programs and policies.

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