Workers Comp Small Companies Strategy
Small Companies Can Operate Like A Self-Insured (in a way) – From the last post, we are going to start with the smallest companies and work our way up to the largest. The theme is saving money by operating like a Workers Comp fully self-insured.
- No Coverage – this is a very controversial topic. I am not saying to avoid paying Workers Comp premiums. In certain states, there is a minimum of employees that are required for the State to require that you have Workers Compensation insurance. Some states will not require a company to have Workers Comp coverage if they have less than three employees. Make sure to email us or call your State’s Department of Insurance before making this decision.
- Ghost Policies – this is another controversial way to cover a small company’s Workers Comp burden. Companies can purchase policies that provide nothing other than a certificate of insurance for Workers Comp coverage. I have come across these with trucking companies. Before buying one of these policies, make sure that all the options are explained to you.
Small Deductible – As companies grow, this may be a viable option. The employer can pay all claims out-of-pocket to a certain amount, say $300. This cuts the small claims down significantly. There are many options for this type of coverage, such as all claims being filed with the insurance carrier, but the first $300 being billed back to the employer. One of the complications of doing this is when the employer does not report a serious claim timely. There are many ways to use the small deductible programs.
The first three options above are for the smaller companies to retain some of their risks like a larger company that is fully self-insured. When an employer retains some of the risk, they can control their Workers’ Comp costs at least partially.
We will move on to the next three tomorrow.
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