Today, a spilled cup of coffee or the twist of a knee on your property can result in a lawsuit. As a business owner, you need to be keenly aware that what appears to be a minor incident could result in a big legal problem.
General liability insurance, property insurance, and worker’s compensation insurance are a must to be in business. General liability insurance will protect the assets of your business in the event it is sued for something perceived (right or wrong) to have done to injure or cause damage.
General liability coverage can be purchased as part of a business owner’s policy or separately. A business owner’s policy will package the liability with the property insurance. Sometimes, when part of a business owner’s policy, the liability limits could be fairly low.
Make sure to review and assess risk with your commercial insurance agent. Keep in mind what can be your perceived risk, like operating a lot of heavy machinery or have a fleet of vehicles on the road. How does it differ from other businesses you know? Look to trade associations, the state department of insurance and your agent for guidance regarding damage awards in your state as well.
The general liability coverage will include legal fees and damages in a covered claim and/or lawsuit. Bodily injury, property damage, personal injury, and general damages are normally covered. Punitive damages are usually not covered as they are awarded when it is determined the act was intentional.
In addition, your policy will spell out maximum coverage and limits during the policy period. It may make sense to purchase a commercial umbrella policy to cover additional risk. Review the limits and work with your commercial to determine what is best for your business.
claims continue to decline. Understand of course, certain industries still continue to have up ticks in claims and costs. These may vary year to year and industry or even industry segments.
Implementing a risk management plan in your business if you have to pay workers compensation insurance premiums is a great starting point.. In the beginning, utilize the risk management staff at your carrier, the company that writes the workers compensation to help you set up your plan.
As you grow and get larger, it may make sense to assign this to staff and eventually, even hire someone to perform this function. Implement safety procedures which make you a better risk for the carrier. Keep a log and track days without incidents. In addition, take a look at the following to see if it may help you reduce your premiums:
- Start a program to allow workers to get back into the work place faster. Establish a step program which would allow for limited capacity which would gradually increase. Remember that rising rates are a result of benefits paid. The earlier an employee can get back to work, the better for everyone.
- Check on how your payroll is reported. Overtime and bonuses may not have to be factored in to payroll costs which help determine your premium.
- Has your company had claims, is it a particular department or group? Investigate and address these as part of your risk management program and make sure to advise your carrier.
- Check your job classification codes, sometimes they may be classified wrong and raise rates.
- Keep your carrier informed of changes and improvements made to the workplace.
- Schedule annual reviews with your carrier and invite them in to see improvements.
- Challenge your carrier if you feel it necessary. Use industry associations and your state department of insurance as a resource.
Don’t be afraid to review your workers compensation annually with all your other business insurance. Work with your commercial insurance broker and the carrier to make sure your coverage, risk exposure, and premium is where they need to be.
Reducing workers compensation premiums takes planning and work.
In the decade or so, workplace safety has been the focus of many companies and industries. As a result, workers compensation claims and costs have declined. Even so, certain industries continue to tick up against the overall patterns.
In order to reduce your workers compensation premiums, you need to attack safety and performance in your business rigorously. If you’re paying workers compensation premiums in your business, you need to establish a risk management plan. In the beginning, your workers compensation carrier should have risk experts available to you and your employees.
Develop regular risk assessment and management meetings with your key employees and the experts at your insurance carrier. As you grow, it may make sense to hire a full time risk manager to work on this for your company.
Meanwhile, it is important to implement your own workplace safety program. Consider developing written procedures for both safety and returning to work. Resources to do this are available from your insurance carrier, the state department of insurance and your licensed insurance professional. Take the time to check how your payroll and employee classifications are relayed to the carrier.
Overtime and bonuses as well job descriptions and classifications which can have an impact on cost if not reported correctly. Investigate claims on your policy and implement written action plans and corrective action plans. Keep both your licensed insurance professional and the insurance carrier informed of any changes and improvements made in the workplace and your risk management program.
Evaluate your workers compensation coverage annually when you review your other coverage for the business. Work with your licensed insurance professional to help you manage both costs and your risk management program. Stay involved as the owner with your risk management and workplace safety programs.