Workers Compensation / Employers Liability is required in most states if you have "any employees" at any time. If you do not carry workers compensation and you have employees it is a violation of laws and regulations.
If you hire from temp. services protect your self in requiring documentation that they carry workers compensation and "require" that you be "named additional insured" under there workers compensation policy and keep in your files contracts, certificate and endorsement. This is our advice to you.
Many employers try to circumvent the requirement for workers compensation by hiring workers and independent contractors. There are "many" pitfalls for such actions.
|Workers Compensation State Manual Link|
At Athena Insurance and Financial Services we can provide you with quotes from a variety of workers compensation carriers. As independent insurance brokers we have access to nearly 200 insurance carriers.
Well Established Businesses
Businesses with 4 years or more experience and carry workers compensation are considered to be a well established business for the purposes "prior insurance history." Businesses with a certain size premium and exceptional loss ratios are the pick of the crop. When a business has a certain size account data becomes available to the "insurance hawks." (jokingly meant) These insurance hawks are the agents and brokers that actively seek out your accounts.
Have you ever wondered how they know when your account is coming up for renewal? Have you noticed how they kind of flock together at certain time periods? It is the nature of the beast. For me personally I like working with accounts where I can take care of both the personal and commercial insurance for a client. But, that is not to say that I will not work just as hard for a single line of business such as workers compensation. As such, most of my business comes from referrals. I am also implying that I am not an insurance hawk.
My experience allows me to provide 25 years plus of training, knowledge and experience with Life Insurance needs, Health, Commercial and Personal insurance. There is nearly no insurance that I have not written. I am not saying that I write "all types of insurance." But I do write a wide variety of insurance. More than a vast majority of most agents you will ever meet. Not bragging... just a known fact.
When people come to us shopping for workers compensation they have usually had conversations with "well established" and successful business owners in a similar business. Most of the time the people they seek advice from are friends or relatives.
It is a good idea to become familiar with the "vocabulary" and requirements of working with workers compensation insurance brokers, on the job training and safety techniques, payroll and audit requirements and so forth. In studying the requirements of the workers compensation industry you can avoid some problematic scenarios.
For example, one of the most common problems we see is the "lack of details" on hours logged in a particular class of trade. And for those of you that are seasoned in having had an audit that resulted in a gasping "What?" You know what I mean.
For those of you that have not had this experience, and this applies to seasoned business owners as well as new ventures, you must keep detailed hours of what trades (class codes) are performed on various jobs if you are wanting to get accurate audit billings. As you are aware some class codes carry a higher rate per $100.00 of payroll than others.
It has been our experience that Workers Compensation Insurance carriers will use the "highest" or "higher" class code rates when documentation cannot be provided.
Here is a real life example. I have a long time contractor who is a licensed California General Contractor. His class codes are primarily for Contractor NOC at a give wage rate paid to employees. He takes on a job with projected costs of nearly $1,000,000.00. What he fails to do is to keep detailed record of what it is the job entails on employees payroll records.
The job that he took on was for "interior trim and finish" for a remodel of an apartment building. When he filed his payroll reports he did not have that class on his payroll reporting for and used the Contractor NOC as the class code.
When he got his audit invoice he almost had a stroke! Fortunate for him the carrier worked with him to get it straightened out but... it could have worked out differently.
I am not excited about new ventures. A new venture is someone that has never carried workers compensation before or has a long lapse in coverage. Why? Because most of the time they are just testing the waters to see if it is practical for them to get workers compensation and hire help. For this reason we have began implementing a broker fee up front on most, but not all, accounts.
For example, in the State of California one of the only carriers is State Compensation Insurance Fund. In recent years they cut back on the number of agents that have access to them directly. As a result our firm has had to work through a Managing General Agent. This translates in about a 33% lost of our gross commissions and added time to process quotes.
The average turn around time for a quote is 5 days after we receive all required documents in order to submit a quote request.
I would say that nearly 50% of the tire kickers do not purchase insurance. What it is that they do or decide is beside me! Maybe they circumvent the system or do not go forth with their hiring. I do not know...
What I do know is that is has become very expensive for us to put out financial resources on a maybe. As a result we charge our processing / broker fee up front, it is non-refundable, and will apply it to your purchase if you decide to go forth with the purchase of workers compensation.
I realize this may be a hard lined approach. I feel it is honest and practical. Furthermore, after a general discussion and evaluation of the business owners needs we divulge this before we get started on the paper work.
Are there other options?
Yes! There are. You can go online in California to the State Compensation Insurance Fund and apply to them directly. Thus avoiding our fee.
Will wee provide assistance when you apply online? NO! We do not get paid except for our fee and a cut-rate in commission from them.
Please let me summarize that this process applies to "New Ventures" and not to other accounts.
As Independent Insurance Brokers we write with nearly 200 insurance companies. When we focus on just the workers compensation section we reduce that number to about 20 insurance companies.
We shop around for you and do our best to get you the most competitive rates, provide you with excellent service and keep our fees, if any, to a minimum. We, like you, need to provide you with quality work and still be able to make a profit.
Thank you for your understanding. We hope to hear from you.