Some Considerations on Your Workers Compensation Premium

by Robert L. Babcock, Warren G. Bender Co., RCAC Premier Sponsor

As a roofing contractor, Workers Compensation is probably your biggest expense. It can impact your monthly cash flow significantly, especially if your policy is on a stipulated billing program. As you may know with Workers Compensation, your insurance company estimates your annual premium and bills you in equal installments with a midterm audit that usually produces an additional bill.

If you have an annual premium less than $150,000, only two carriers will offer you a quote. If your annual premium is more than $200,000, your insurance broker can approach a total of 4 or 5 markets if he is fortunate enough to have appointments with the relevant markets. But there can be a big difference in rates depending on which broker submits your application to one of those markets. Acquiring the necessary information from Safety Compliance and submitting as many details as possible to the underwriter can result in a potentially better final rate for you.

How does your broker use his commission?
The commission paid to brokers is essentially the same, but what is your broker doing with the commission he receives?

• Are you receiving outside claims help for past and present claims exposure?
• Is someone working with the claims adjuster, doctors or attorneys trying to close your claims?
• Is someone trying to get the reserves closed, or at least lowered before the next mod factor is calculated?

All claims and payroll information used to calculate your next mod factor are sent to the WCIRB six months after your renewal date. Therefore, those six months are critical for lowering your mod factor by having claims closed and reserves closed, or at least lowered.

There is much more to receiving and maintaining good rates and premiums than simply looking at your policy renewal. Since Workers Compensation is your largest overhead expense make sure you see all the markets that are available to you, and you are getting your questions answered by your current broker.