The Five Ds of Workers’ Compensation Insurance
Brought to you by Agri-Services Agency
There are many factors to consider when selecting your workers’ compensation insurance. Here are some terms – five Ds – you may have heard and the affect they have on the cost of your coverage.
Dividends. Dividends are a way to share in the good performance of your operation. If you and your employees have a safe year with minimal or no claims, some workers’ compensation programs will provide an annual payment or dividend back to you. Dividends are another item to think about when calculating the overall cost of your coverage.
Documentation. Regular documentation of incidents can have a major impact on timing, complications and payment of claims. When you take the proper steps to record a claim, everyone has an early understanding of the issue and the process will move much more effectively. Even for small accidents that fall below a certain threshold, it’s best to report these incidents in case there are complications later and workers’ compensation coverage must be tapped to pay medical bills or legal defense.
Develop. Here’s where the proverbial rubber hits the road. The best way to reduce your workers’ compensation premium is to develop a strong culture of safety. The best workers’ compensation programs will help you do this by providing safety training, loss control and risk management services, claims management, regulatory compliance assistance and 24/7 live customer service.
By working together with your carrier’s loss control team, we can help reduce on-site risks and improve employee’s safety record. You’ll not only lower your insurance costs, but also your workers will be safer and your operation will run more efficiently. If your workers’ compensation company doesn’t provide loss control services, you may not have the right coverage.
Discounts. Be leery of discounts. Yes, discounts can lower your initial costs, but there are other ways companies will make that money back, typically through management and administration fees. Discounts are not meant to forge long-term partnerships; you may save now, but you’ll wind up paying more overall. A company that wants to partner with you doesn’t use discounts or lower up-front pricing schemes. A partner will provide a fair and understandable price with no hidden costs or fees right from the start.
Deductibles. You’ve probably heard of deductibles, they’re a factor in nearly every type of insurance and allow you to share risk with your insurance company. The higher your deductible, the more you will likely have to pay out of pocket for smaller claims. For example, if you’re deductible is $10,000 and you have a claim for that amount, you will have to pay the entire amount.
If your deductible is $10,000 and you have a claim for $20,000, you and your insurance company will each pay $10,000. As your deductible increases your insurance premiums are typically lowered because you are willing to take on more risk yourself. However, you need to be cautious, several small claims can quickly wipe out any savings you realized on your premium. Carefully consider the risk you are willing to assume when you select your deductible and the overall effect it will have on your insurance cost.
Paying attention to these five Ds and working with a company that partners with you
– like Agri-Services Agency- will help ensure you are effectively managing your workers’ compensation insurance coverage. The team at ASA will work with you to help you optimize your coverage and make sure you’re taking advantage of services and programs to help reduce claims. Our goals are to help keep your workers safe and cover you correctly at a price that fits your budget.
Agri-Services Agency Phone: 877-466-9089