Table of Contents
- Why do I need Work Comp?
- How can I lower my premium?
- Aren't all rates the same?
- What is a loss cost multiplier ?
- What is an experience mod?
- Why am I audited?
- How do I prepare for an audit
- How can the Eck Agency help?
Why do I need Work Comp?
Workers Compensation/Employer's Liability is required by most state laws. Even if you have a small business and aren't required to carry work comp it is a good idea. Without work comp insurance you can lose your business if an employee sues you after being hurt while on the job.
Civil penalties from the State of Kansas against the employer are $25,000 or twice the premium the business would have paid (which ever is higher) if you are required to have work comp and don't. If an employee sues and wins (which is likely), punitive damages can be assessed.
In Kansas, if you have payroll of $20,000 a year or expect to have that much, you are required to carry workers comp.
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There are many actions you can take to legitimately lower your work comp premiums, for example:
 | Keep detailed job descriptions and assign a limited number of workers to the most costly types |
| Segregate payroll records by job type and duties |
| Have written safety procedures which are given to employees both for inside people and drivers |
| Conduct regular safety meetings and document attendance |
| Encourage employee feedback and involvement |
| Consider a deductible so that you handle small claims yourself |
| Report all claims promptly--immediate response reduces claim amounts |
| Have a reporting plan in place and pre-select a doctor or clinic for initial treatment of any reported injuries |
| Work with the loss control department of your carrier to minimize situations that can result in claims |
| Get a quote from us. |
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Aren't all rates the same?
The basic rates for all types of occupations are set by the National Council on Compensation Insurance (NCCI), but each insurance company has a loss cost multiplier that is applied to the NCCI rates to determine the premium (higher or lower). The premium is further modified by your loss experience, your experience mod.
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What is a loss cost multiplier?
It is the factor that insurance companies apply to the NCCI base rate to either raise or lower the base rate. Obviously, if an insurance carrier has a lower loss cost multiplier, your premium will be lower. We work to find you a carrier that has a lower rate and has expertise in your industry.
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What is an experience modifier (experience mod) ?
The factor that is applied to your premium that is a result of your claims experience. It is based on the size and frequency of claims in relation to your premium and the average claims for your industry in your state. It is set by the NCCI
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Why am I audited
Workers compensation premiums are based on estimated payroll. At the end of the policy year (in most cases), the insurance company checks with you to see what your actual payroll was. If your payroll was less than the estimate, you receive a credit. If your payroll was more than estimated, additional premium for the preceding year is due and must be paid. It is a good idea to come as close as you can in estimating your actual payroll for the year, otherwise you can end up paying a big audit premium. See How to Prepare for an Audit for additional information
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How can the Eck Agency help me?
We are experts in work comp. We stay current with changes in workers compensation laws and industry changes. We look for the company that is best suited to your business. We help educate our clients on how to keep their premium at a reasonable level. Ask for a quote
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| Products and services offered by the Eck Agency may not be available in all states. This information shall not constitute an offer in any state in which a product or company is not properly registered or licensed. The Eck Agency generally offers and sells work comp only to businesses domiciled in the state of Kansas, Oklahoma, though coverage can extend to operations in other states. This information shall not constitute an offer in any foreign country. |