Any company with employees needs to have Worker’s Compensation insurance. It isn’t optional, like medical insurance, and it isn’t managed by the state, like Unemployment Insurance.
You’ll need to buy it before that new employee starts on their first day.
What less informed companies do is ask their insurance broker. After all, that broker sells you your Property and Casualty Insurance, your Business Liability Insurance, maybe even the Auto policy for your business. And that broker is happy to sell you a Worker’s Comp policy as well.
Here’s the problem with your Broker
Your broker’s commission is determined by the size of the policy. The larger your premium, the more the broker is paid. This sounds perfectly reasonable, until you consider this: your broker is paid more if your claims are managed poorly.
When one of your employees is hurt, there are things you legally can and cannot do in the process of the claim. However, if you step away completely, your injured employee and their doctor will control the entire process. You will have no say at all in when the employee comes back, or what kind of care they receive. You’ll just get the bill.
Your broker will sympathize with you, naturally. He may even “shop the policy around” to different carriers. But now that your mod has gone up, every carrier will have higher rates for you. The insurance company passes its costs on to you, you are charged more, and your broker makes more in commission.
What if your business’s interests were the same as your Worker’s Comp carrier’s?
In OEM’s model, our clients have the same interests as we do. We want to keep your injuries low, because that reduces our costs. When you have injuries, we manage the costs, because those costs are actually ours. Full transparency here: we make more money if your employees stay safe. Can your broker say that?
To find out a better way to get worker’s compensation insurance for your small business, fill out the “Contact” form. Let us show you a better way.